Senate OKs bicam report removing addt'l taxes on foreign carriers

Posted at 01/23/13 7:25 PM

MANILA, Philippines - The Senate on Wednesday has ratified a bicameral conference committee report removing the common carriers' tax and Gross Philippine Billings Tax (GPBT) slapped on foreign airlines and shipping firms.

In a statement, the Senate said the 2.5% GPBT and 3% common carriers' tax on cargo and passenger revenues originating from the Philippines have been waived as long as the home country of the foreign carriers agree to give a similar tax exemption to their Philippine counterparts.

The removal of the two taxes levied on foreign carriers have long been urged by non-Philippine airlines and shipping companies as these have made them less competitive in the market.

"We hope to spur capacity growth of the passengers’ traffic in our country both in international air transport and sea transport... We hope that this bill will be catalyst for capacity growth," Senator Franklin Drilon said in the statement.

"We are targeting 10 million arrivals by 2016. To be able to achieve this goal, we need available capacity of 15 millions seats, but, currently, we only have 6 millions seats," he noted.

Aside from increasing tourist arrivals in the country, the move is expected to lower traveling costs for Filipinos.

Drilon said the new measure will take effect in February as it is seen to be ratified by both chambers of the House this week.