Philippines Parliament Approves Removal Of Airline Taxes

http://www.tax-news.com/news/Philippines_Parliament_Approves_Removal_Of_Airline_Taxes____55651.html

The Philippines House of Representatives has approved, at a third and final reading, a bill which seeks to “rationalize” the taxes on international air carriers, to boost tourism and enable the country to honour tax exemptions under tax treaties and other international agreements.
Airlines have, for some time, lobbied for the removal, or at least a reduction, in the 2.5% Gross Philippine Billings Tax (GPBT) and the 3% Common Carrier’s Tax (CCT) to which they are subjected. The GPBT and CCT are levied on all revenues, passengers, cargoes and excess baggage leaving the Philippines.

The taxes have caused a total withdrawal of foreign airlines, one by one, from providing direct flights to Manila. Air France-KLM dropped the only remaining direct flight from Manila to Amsterdam in March this year, due to the high taxes it paid for loading passengers in the Philippines.

It has been calculated that the GPBT and CCT have increased air travel costs significantly for the marginally-profitable airline industry and for the highly price-sensitive leisure traveller, especially for a country where 98% of tourists arrive by air; and that the benefits of GPBT/CCT removal could be measured in thousands of new jobs, increased revenue from more foreign tourists, and lower cargo transport costs for its exports.

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