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TIEZA backs ‘rationalizing’ travel tax after DoF threat

tieza backs rationalizing travel tax after dof threat - TIEZA backs ‘rationalizing’ travel tax after DoF threat

THE Tourism Infrastructure and Enterprise Zone Authority (TIEZA) said it accepts the need to “rationalize” the travel tax a day after the Department of Finance threatened to take it away due to alleged underspending by the agency.

In a statement, it said it supports the rationalization of the travel tax, including the simplification of the current two-tier charge to a flat rate.

TIEZA issued the statement late Thursday evening in response to Finance Carlos G. Dominguez III’s threat to eliminate travel taxes if the agency does not spend faster after it accumulated about P14 billion from the tax.

“It is high time to revisit and rationalize the Philippine Travel Tax System and come up with a win-win solution. TIEZA supports House Bill (HB) No. 5369 filed by Tourism Committee Chairperson, Rep. Sol Aragones, reducing the current fee to a flat rate and reallocating its use towards a tourism development fund,” TIEZA said.

TIEZA said ithe P14 billion cited by Mr. Dominguez has been allocated, including P7.95 billion for board-approved projects between 2009 to 2018, P5.2 billion for projects approved last year and the remaining P2.12 billion for scheduled payables.

“The travel tax is in place and definitely we will look at its elimination… In fact, I had a meeting with the TIEZA people recently and I noted that they have P14 billion in their account. And I told them if they don’t spend it, I will take it away,” Mr. Dominguez said Thursday.

Since 2017, TIEZA said its board approved P8 billion worth of projects, including the Boracay Water Drainage Program Phase II, the rehabilitation of Burnham Park in Baguio City, the construction of a sewage treatment plant in Coron, Palawan and master plans for key tourism sites.

It said its annual budget allocation for infrastructure projects continued to increase yearly. “From P969.6 million in 2017, it has increased to P1.85 billion in 2018 and surged to P5.2 billion in 2019,” it said.

The agency said the implementation of some projects has been delayed due to “government ownership of project site, issues on right of way, non-liquidation of initial funding/tranches (and) changes in leadership, etc. which are being addressed internally by the authority and its board.”

Ms. Aragones filed HB No. 5369, which seeks to abolish the travel tax, and insread create a tourism development fund that will be funded through “tourism fees”. The measure is has been pending at the House of Representatives since November.

According to TIEZA’s website, travel tax rates for economy and business class flights are at P1,620 currently while first class flights are taxed P2,700.

The agency receives half of the total revenue collected from travel tax while the Commission on Higher Education receives 40% while 10% goes to the National Commission for Culture and Arts. — Beatrice M. Laforga

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