The House of Representatives has adopted a resolution calling on Philippine President Rodrigo Duterte to renew the policy that grants travel tax exemptions to passengers departing from Mindanao and Palawan going to any destination in the Brunei Darussalam, Indonesia, Malaysia, Philippines-East ASEAN (Association of South East Asian Nations) Growth Area (BIMP-EAGA).
House Resolution No. 1463 seeks to renew the policy that grants travel tax exemption covering all passengers departing from all seaports and airports in Mindanao and Palawan to BIMP-EAGA to help enhance trade, tourism, and investments in these areas, the Lower House said in a statement.
The resolution pointed out that the revenue losses from the tax exemption can be compensated by the projected economic and social gains in Mindanao and Palawan, as well as the country as a whole.
It said that among the BIMP-EAGA member countries, only the Philippines collects travel tax on its outbound international travels, which runs counter to the sub-regional objective of promoting connectivity and accessibility within the EAGA focus areas as well as facilitating freer movement of people, goods, and services.
The resolution further states that the call to renew the travel tax exemption policy of government comes at an opportune time when Mindanao is being positioned as a strategic logistical hub not only in the ASEAN but also in the rest of Asia under the ASEAN Connectivity Master Plan.
It emphasized that it is essential for the government to capture the interest of travel service providers to invest in Philippines-EAGA routes by providing the necessary incentives, one of which is the travel tax exemption for international travels from Mindanao and Palawan to all EAGA destinations.
Former President Fidel Ramos, in an effort to promote mobility of travelers across the sub-regional areas and encourage airline companies to open up services within the Philippines-EAGA routes, issued Memorandum Order No. 237 and No. 266 in 1994 and 1995, respectively, granting travel tax exemption to all passengers originating from Mindanao and Palawan, by air and/or by sea, to any destination within the BIMP-EAGA.
The exemption was renewed several times but discontinued in 2008 through 2014, the year the exemption was renewed for three years. The exemption expired in October 2017.
With the renewed interest in the Philippines with the recent opening of flights from Davao to Kuala Lumpur (Air Asia) and Zamboanga to Sandakan (Cebu Pacific), Mindanao Development Authority Chairman Secretary Datu Hj. Abul Khayr Alonto earlier said renewing the travel tax exemption policy is a step forward in sustaining and accelerating socioeconomic development in the country, especially in Mindanao.
“As it is quite challenging for the Philippines to establish direct connection with the neighboring countries simply because our areas are separated by seas, the renewal of this policy will help bring the Mindanao and Palawan’s vast potential to the forefront as we work towards BIMP-EAGA’s greater goal of increasing trade, tourism, and investments,” Alonto added.
HR 1463 was authored by committee on tourism chairperson Lucy Torres-Gomez (4th District, Leyte), Mercedes Cagas (Lone District, Davao del Sur), Gil Acosta (3rd District, Palawan), Frederick Siao (Lone District, Iligan City), Glona Labadlabad (2nd District, Zamboanga del Norte), Ma. Lucille Nava (Lone District, Guimaras), and Makmod Mending Jr. (Party-list, AMIN).
Launched in 1994, the BIMP-EAGA sub-regional cooperation is a key strategy to accelerate social and economic development of less developed areas in the participating countries. The travel tax exemption initiative is under the sub-region’s strategic pillar focusing on enhancing connectivity within and beyond BIMP-EAGA.