MAY 25, 2012 DATE

NR # 2750
REF. NO.

House approves on 3rd reading bill rationalizing taxes on international air carriers
The House of Representatives has approved on third and final reading House Bill 6022 seeking to rationalize the taxes on international air carriers which lawmakers said would boost tourism in the Philippines and enable the country to recognize the tax treaties that have not been honored. House Bill 6022 titled Rationalizing the Taxes on International Air Carriers operating in the Philippines seeks to amend Sections 28 (A) (3) (a) , 108 (B) (6) and 118 of the National Internal Revenue Code of 1997, as amended. It provides that international air carriers doing business in the country shall not be liable to pay a tax of two and a half percent on its Gross Philippine Billings pursuant to the principle of reciprocity. The grant of reciprocal exemptions to international air carriers shall enter into force 30 days from the exchange of diplomatic notes between the Philippines and the foreign jurisdiction. Said diplomatic notes shall constitute the agreement between the two countries, the bill provides. As defined in the bill, Gross Philippine Billings refers to the amount of gross revenue derived from carriage of persons, excess baggage, cargo, and mail originating from the country in a continuous and uninterrupted flight, irrespective of the place of sale or issue and the place of payment of the ticket or passage document. The measure also provides that the transport of passengers and cargo by domestic and international air or sea carriers from the Philippines to a foreign country shall be subject to zero percent value added tax rate. It also exempts international air carriers doing business in the country from payment of the three percent tax of their quarterly gross receipts. The tourism and travel sectors have earlier expressed support for the measure as it would boost tourism in the Philippines through enhanced international air transport connectivity. Tourism Undersecretary Daniel Corpuz said the tax exemptions will enhance the tourism policy of the government and support the tourism industry in the Philippines which has a projected target of 4.2 million tourists for 2012. He said the current tax regime hampers the countrys international air transport connectivity which is the most critical infrastructure linking the Philippines to the gross tourism market.

MAY 25, 2012 DATE

NR # 2750
REF. NO.

Marciano Ragaza, a trustee of the Philippine Travel Agencies Association, said the entry of foreign airlines to the country in light of the removal of onerous taxes will generate more economic activity not only in terms of tourism but by trade and industry like exports, among others. Steven Crowdey, vice chairman of the Board of Airline Representatives (BAR), said the passage of the proposal will definitely improve their connectivity to the Philippines and promote trade and tourism. House Bill 6022 is authored by Reps. Hermilando Mandanas (2nd District, Batangas), Jerry Treas (Lone District, Iloilo City), Giorgidi Aggabao (4th District, Isabela), Isidro Ungab (3rd District, Davao City), Rufus Rodriguez (2nd District, Cagayan de Oro), Tomas Apacible (1st District, Batangas), Fernando Gonzalez (3rd District, Albay), Luis Villafuerte (3rd District, Camarines Sur), Roger Mercado (Lone District, Southern Leyte), Florencio Miraflores (Lone District, Aklan), Elmer Panotes (2nd District, Camarines Norte), Rodolfo Albano (1st District, Isabela) and Antonio Alvarez (1st District, Palawan).(30) rbb