Press Release
January 23, 2013

Senate ratifies bicam report on international carriers and shippers tax

The Senate on Wednesday ratified the bicameral conference committee report removing the taxes currently being imposed by the Philippine government - the only country imposing such taxes - on international carriers and shippers.

Under the measure, the 2.5 percent Gross Philippine Billings Tax (GPBT) (GPBT) for carriage of persons and their excess baggage that international carriers and shippers are mandated to pay under the current tax code will be waived provided that the home country of these foreign carriers will agree to give a similar tax exemption to Philippine carriers.

Further, the 3 percent common carriers' tax (CCT) insofar as it concerns the revenues on the passengers and their excess baggage would not be applied.

"We hope to spur capacity growth of the passengers' traffic in our country both in international air transport and sea transport. We are targeting 10 million arrivals by 2016. To be able to achieve this goal, we need available capacity of 15 millions seats, but, currently, we only have 6 millions seats. Therefore, we need nine million seats more. We hope that this bill will be catalyst for capacity growth," stressed Drilon.

"The removal of these taxes will improve the present situation where our tax policies seem to directly contravene our tourism goals," said Drilon earlier, adding that the bill, once become a law, will result in increased tourist arrival and lower and more affordable fares.

"The Department of Tourism estimates that the increase in tourist arrivals will generate P455 billion in 2016 and will provide six million jobs," said Drilon. He noted that, with passage of the bill, international arrival is expected to increase to 5.55 million in 2013, 6.75 million in 2014, 8.126 million in 2015 and 10 million in 2016.

He added that the enactment of this measure will translate to lower traveling costs for overseas Filipino workers who will be enjoying lower fares to the country. It will also lower business costs for domestic carriers with foreign operations as soon as the tax exemptions on their gross billings are reciprocated by other countries, ended Drilon.

Senate Bill 3343 - which was certified urgent by the President - was passed on third and final reading in the Senate last December 19 with 16 affirmative votes, zero negative vote.

"The measure will be effective by the middle of February. We will have it ratified by both Chambers this week. Next week, the enrolled copy will be endorsed to the President for signing. After signing, it will take effective 15 days from the day of publication," ended Drilon.

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