DOF backs bid to extend travel tax exemption in EAGA
Davao City (21 October) -- The Department of Finance (DOF) is supporting bid to revive the granting of the travel tax exemption to all passengers traveling in the Brunei Darussalam-Indonesia-Malaysia-the Philippines East ASEAN Growth Area (BIMP-EAGA).
In a memorandum to the Office of the President issued last month, Finance Secretary Gary Teves said that the Philippine government may extend the privilege of travel exemption to passengers departing from Mindanao and Palawan to any destination within the BIMP-EAGA for another three years, ending until September 2012.
"I concur on the request for the issuance of a Memorandum Order extending the grant of travel tax exemption to all passengers originating from Mindanao and Palawan to any destination within the BIMP-EAGA for a period of three years," a statement from the memorandum signed by Teves said.
DOF has also recommended that the Philippine government extend the grant of the TTE under the "principle of reciprocity" in which the three other countries comprising the EAGA sub-region extend the same privilege to passengers bound for BIMP-EAGA destinations.
The memorandum also cited that the said measure would be beneficial to the "growth area concept" which promotes cooperation among the BIMP countries and for the promotion of tourism and investment in the sub-region.
The exemption from payment of travel tax amounting to about P1, 620 started in 1995 as a policy modification initiative of the government in support of BIMP-EAGA. The exemption had undergone renewal of extensions during past administrations. On August 2006, President Gloria Macapagal-Arroyo also extended TTE which then expired last September 2008.
"The position of DOF on the travel tax exemption certainly augurs well with our continuing efforts to revitalize the BIMP-EAGA initiative. By reducing the cost of traveling within the sub-region, this effort will help enhance connectivity and accessibility of EAGA focus areas as well as facilitate freer movement of people and services, "said Sec. Jesus Dureza, Philippine Signing Minister to the BIMP-EAGA and Presidential Adviser on Mindanao.
The exemption from the payment of travel tax for the promotion of tourism and investment in the BIMP-EAGA region has been granted for the last 14 years (1995-2008). Of the 450,645 passengers granted travel tax exemptions through the Presidential approval, the majority numbering 365,669 passengers, were connected with the BIMP-EAGA.
Enjoying the TTE by virtue of the MO issues are Filipinos and Philippine resident aliens leaving Mindanao for BIMP destinations, either as tourists or for business-related trips.
Undersecretary Virgilio Leyretana, chairperson of the Mindanao Economic Development Council (MEDCo), said that TTE should be extended especially now that the Zamboanga-Sandakan air link will be revived.
Recently, Zest Air launched its Zamboanga-Sandakan flight last week. Using a 56-seater MA 60 modern ark aircraft, Zest Air will ply the route on a thrice a week schedule, every Monday, Wednesday and Friday.
"Since travel tax exemption was granted by the government, traveling from Mindanao and Palawan to any area in BIMP-EAGA has been very encouraging, creating an impact in the growth of tourism, trade and investments in the sub-region," Leyretana said.
The proposal for extension was prepared and submitted by the Mindanao Economic Development Council (MEDCo).
DOF submitted the recommendation to the Office of the President who will give the final approval for the said measure through a Memorandum Order (MO). The Philippine Tourism Authority (PTA) has earlier submitted their letter of concurrence last year. (MEDCo) [top]