‘Travel tax removal to benefit ASEAN destinations’

MANILA, Philippines — Southeast Asia as a tourism destination stands to gain from the removal of Philippine travel tax, as the measure would make it cheaper for Filipinos to travel around the region.

In a report, the Congressional Policy and Budget Research Department (CPBRD) said abolishing travel tax could boost regional travel because Filipinos tend to fly closer to home.

Using data from the Tourism Infrastructure and Enterprise Zone Authority (TIEZA), the CPBRD said forgone revenues would have hit P3.57 billion in 2024 if Filipinos traveling to a Southeast Asian destination were exempted from travel tax.

In 2024, TIEZA data showed 2.4 million Filipinos traveled within Southeast Asia, particularly Singapore, Thailand, Malaysia, Vietnam and Indonesia.

Travel tax collection reached P7.86 billion in 2024. Given this, CPBRD measured that 45 percent of forgone revenues will come from Southeast Asian travel.

By type of flight cabin, CPBRD said 96 percent of travel tax collection in 2024 was taken from economy passengers, amounting to P7.52 billion.

Further, CPBRD said TIEZA has earned just P337.2 million from business class guests and only P2.1 million from first class passengers.

The margin is wide even though TIEZA charges a travel tax of as high as P2,700 for business and first class passengers and up to P1,620 for economy flyers.

“On average, around 95.5 percent constitutes the economy class. There are proposals seeking to remove travel tax on economy class tickets,” the study read.

The House of Representatives recently approved House Bill 8464, a measure that seeks to scrap travel tax. The legislation, a priority under the Marcos administration, intends to make it cheaper for Filipinos to travel.

Lawmakers, however, must find a way to plug the revenue gap to be left behind by the abolition of travel tax.