House OKs bill exempting foreign airlines from taxes

by Jess Diaz, The Philippine Star

Posted at May 26 2012 08:06 AM | Updated as of May 27 2012 03:01 AM

MANILA, Philippines - A bill seeking to exempt foreign airlines from at least three taxes has been approved on third and final reading at the House of Representatives.

Under Bill 6022, foreign airlines would no longer be required to pass the two-and-a-half percent gross billings tax.
The term “gross billings” would refer to the amount of gross revenue derived from carriage of persons, excess baggage, cargo, and mail.
The bill aims that the transport of passengers and cargo by domestic and international air or sea carriers from the Philippines to a foreign country would be subject to zero percent value added tax rate.
It would also exempt international air carriers doing business in the country from payment of the three percent tax on their quarterly gross receipts.
The tourism and travel sectors have expressed support for the bill as it would boost tourism in the country through enhanced international air transport connectivity.
Foreign airlines have stopped their direct flights after complaining of heavy taxation. 
They are picking up passengers in other Asian aviation hubs, where they are either exempt from taxation or pay lower taxes.
Tourism officials said the decision of foreign air carriers to stop direct flights to Manila has reduced the number of foreign tourist arrivals.         
Among the authors of Bill 6022 are Jerry Treñas of Iloilo City, Giorgidi Aggabao of Isabela, Isidro Ungab of Davao City, Roger Mercado of Leyte, Rodolfo Albano of Isabela, Antonio Alvarez of Palawan, and Rufus Rodriguez of Cagayan de Oro City.