For travelers departing from the Philippines, the term “Travel Tax” is often encountered, but its purpose and allocation remain unclear to many. Contrary to popular belief, this tax does not directly go to airports or their operations. Instead, the Philippine Travel Tax is a government fee collected from Filipino citizens and some foreign residents when traveling abroad. Here’s a breakdown of what the Travel Tax is, where it goes, and how it came to be.
What is the Philippine Travel Tax?
The Travel Tax in the Philippines is a fee imposed on Filipino citizens, permanent resident foreigners, and non-immigrant foreign nationals who have stayed in the country for more than a year. The amount is levied on passengers flying to international destinations, regardless of the airline or the class of service. The full rate for economy passengers is PHP1,620, while first-class passengers are charged PHP2,700. There are discounted rates for students and children, but certain individuals such as overseas Filipino workers (OFWs) and government officials on official business are exempt from paying this tax.
Why does it exist?
The Philippine Travel Tax was created by virtue of Presidential Decree (PD) 1183, issued in 1977. The idea behind the tax was to help generate additional revenue for various government programs, especially those related to tourism and educational initiatives. Since its inception, the tax has been a long-standing requirement for Filipino travelers going abroad, though many still do not fully understand where the money goes.
Where Does the Travel Tax Go?
The most common misconception about the Philippine Travel Tax is that it goes to fund airport operations and improvements. In reality, none of this tax goes to the airport or is used for its maintenance. Instead, the collected fees are allocated among three key government bodies:
- Tourism Infrastructure and Enterprise Zone Authority (TIEZA) – 50% of the collected travel tax goes to TIEZA. This agency is responsible for developing and maintaining tourism-related infrastructure and investment in tourism enterprise zones. It funds the construction of tourist facilities, improving the experience for both local and international visitors.
- Commission on Higher Education (CHED) – 40% is allocated to CHED. The funds are used to support programs related to higher education, including scholarships and financial assistance for Filipino students pursuing undergraduate and postgraduate degrees.
- National Commission for Culture and the Arts (NCCA) – 10% goes to NCCA, which is tasked with promoting, preserving, and enhancing Filipino culture and the arts. The commission uses this allocation to fund various cultural programs, projects, and grants that contribute to the promotion of Filipino heritage.
Philippine Travel Tax History
The Philippine Travel Tax was introduced through PD 1183 during the administration of former President Ferdinand Marcos (senior). The decree initially targeted Filipinos who could afford to travel overseas, and the revenues collected were intended to support the national government’s efforts in tourism and education.
Over the years, the tax has seen changes, with certain exemptions and reductions introduced to cater to specific sectors, such as OFWs and students. The exemptions recognize the contributions of OFWs to the economy, while the discounts for students acknowledge the financial challenges associated with educational travel.
In recent years, discussions about revisiting the travel tax system have surfaced, with some advocating for reforms that reflect the current travel landscape and the need for a more equitable tax structure.
How is the Travel Tax Paid?
Paying the Philippine Travel Tax is a straightforward process. Most airlines already include the travel tax in the total ticket cost, especially for tickets booked online. However, for those flying with airlines that don’t include it, the tax can be paid at designated counters in airports before departure. There are also online portals where passengers can pay the travel tax ahead of time to avoid delays at the airport.
Travel Tax Exemptions
Several exemptions exist for Filipino travelers. The most common groups that qualify for exemptions are:
- OFWs (Overseas Filipino Workers): OFWs are exempt as they are considered economic contributors through their remittances.
- Government officials: Traveling on official business, government officials, and employees are exempt from the tax.
- Infants: Children under the age of two are exempt as long as they do not occupy a seat.
The Philippine Travel Tax is an essential revenue-generating mechanism for the government, aimed at supporting the country’s tourism, education, and cultural sectors. While it may seem like an additional cost to travelers, the tax helps fund critical infrastructure and programs that benefit Filipinos in the long run. As travel continues to grow, it’s crucial for travelers to understand where their money is going and how it is being used to support national development.