Making travel cheaper
I flew out of Manila recently, and tucked into my ticket’s price was a charge I had hoped would be gone by now: the travel tax.
In February, I wrote about the President’s push to abolish it. I also asked for an accounting of the billions it has raised over the years. Passengers have a right to know where that money went and what it paid for.
Nine months on, economy-class passengers paying the full rate still shell out P1,620. Whatever urgency there was in February seems to have faded.
The House, to its credit, approved House Bill 8464 on March 16 and sent it to the Senate the next day. By late September, lawmakers were still urging its passage before the holiday rush. There has been legislative progress, but passengers have yet to see the savings.
Meanwhile, the Department of Tourism (DOT) is pushing to bring turboprop flights back to NAIA. It said that moving those flights to Clark has made domestic travel harder and costlier, especially for passengers who must first make the drive from Metro Manila.
That concern is fair, I believe. Getting to the airport takes time and money, and both count toward the cost of a trip.
But if DOT is looking at what makes travel expensive, the travel tax should be high on its list. The Tourism Infrastructure and Enterprise Zone Authority (TIEZA), which collects it, is attached to the department. The DOT should resolve the funding questions surrounding abolition with the same urgency it applies to the airport debate.
The commitment to remove this burden also goes back much further than this year’s bill.
Book an economy-class flight to Bangkok, Hanoi or Kuala Lumpur and unless you qualify for an exemption or reduced rate, you pay the same P1,620 travel tax as someone headed to London. That sits awkwardly with an agreement the Philippines signed at the ASEAN summit in Phnom Penh in November 2002.
Under the ASEAN Tourism Agreement, member countries agreed to phase out travel levies and taxes on their nationals traveling to other ASEAN countries.
The agreement set no timetable, and signing it did not automatically repeal Philippine tax law. Still, the absence of a deadline should not be a reason to postpone action indefinitely.
Overseas travel and domestic connectivity may be separate issues. Scrapping the travel tax will not make it easier for a passenger to reach a Philippine island. Those travelers need convenient, affordable connections too.
But DOT can work on both. Helping domestic travelers does not weaken the case for honoring a regional commitment and reducing the cost borne by Filipinos traveling abroad.
As for turboprops, the proposal should be judged on its overall effects. NAIA has limited runway capacity, and allocating slots to one service affects the capacity available to others. Regulators must weigh access to smaller destinations alongside the needs of passengers across the airport’s network.
Transport officials have called for a review of the proposal’s tourism, commercial, financial and operational impact. That is the right approach and review should establish the benefits and tradeoffs, while giving alternatives – including better connections to Clark – a serious look.
DOT should also explain why departing passengers must continue funding programs that could be paid for through the national budget.
Half of the collections go to TIEZA, 40 percent to the Commission on Higher Education (CHED) and 10 percent to the National Commission for Culture and the Arts (NCCA). These agencies need funding, but that does not mean every allocation is necessary or every peso is well spent. That was my point in February.
If the agencies say its abolition would hurt important programs, let them identify those programs, explain what they cost and show what they have achieved. Congress can then decide what merits continued funding. Passengers should not have to keep paying indefinitely while the government works out a replacement.
The Tourism Act of 2009 already calls for alternative funding if the travel tax is phased out under international agreements. Abolition proposals have also identified the national budget as a replacement source. This is a problem the government has long known it needed to resolve.
I heard from official sources though that despite the President having certified the bill abolishing the travel tax, the measure might never see the light of day, at least not under this administration. Given the current budget deficit, government could not find other sources of funding, at least for CHED’s scholarship programs financed by the travel tax proceeds and the NCCA.
Scrapping it should not end the demand for an accounting, either. Congress can move to repeal the tax while the Commission on Audit examines past collections and spending. Travelers should not have to finance another year of collections while waiting for answers about previous ones.
So here I am, back on the subject I wrote about in February. The government says it wants travel to be cheaper. A bill that would deliver a specific saving to passengers has already cleared the House.
DOT should help push it through. Twenty-four years after the ASEAN commitment, Filipinos deserve a clear timetable for relief.
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