“This structure hindered our tourism industry from taking off and drove international airlines away from landing on our airports,” stressed the veteran legislator. Many European carriers terminated their routes to the Philippines on account of the CCT and GPBT.
Last year, Air France-KLM scrapped its Manila-Amsterdam route, ending 60 years of direct flights into the country while Qatar Airways ceased its Doha-Cebu connection which began in 2003. Both airlines cited economic and commercial reasons for the cancellations.
“It simply wasn’t viable anymore for foreign carriers to fly directly to our shores,” said Angara. “We may have been maintaining tax revenues, but we were effectively shutting ourselves off from the rest of the world.”
The Chair of the House Committee on Technical and Higher Education continued that lifting the taxes angles the country in the right direction.
“For one thing, we’ll definitely be in tune with reaching our goal of 10 million foreign arrivals by 2016, especially when we need more airline seats flying into the country. Hopefully, direct flights from Europe and some parts of the Middle East will be reinstated.”
Proponents of the new scheme have said that the increase in tourism arrivals will more than compensate for the P2.5 billion worth of foregone revenues to the Bureau of Internal Revenue (BIR).
Under the new scheme, the CCT will not be levied while the GPBT will be waived for foreign carriers if their home countries reciprocate with a similar tax exemption for Philippine carriers.
"The reciprocity will definitely attract more flights into the country, but it will also help lower the costs for local carriers with international operations,”
The former law professor however lamented that shortfalls in infrastructure and personnel still pose challenges to the travel industry in the country.
“It is an absolute must that we build more airports with sufficient runways and upgrade existing aviation facilities. Many of our provincial airports don’t even have lights along their runways, limiting the number of flights possible during night time.”
He also urged government to help build up a workforce for security, immigration and even quarantine services in airports.
“Government must take the lead in training and deploying the necessary personnel and not pass on the associate d costs to the industry players. We’re the only country who runs their system this way and it renders us very uncompetitive.”
The Harvard-trained lawyer emphasized that momentum is definitely building up for breakthrough growth in our tourism and in turn our travel and aviation industry, saying “It will only be lost if we don’t get our act together very soon.”
He concluded, “Lifting the CCT and GPBT—while important—is only one step among the myriads of other initiatives that will hopefully attract more tourists and bring in more investors. Still, by making it relatively cheaper to fly in and out of the country, we send a clearer message that the Philippines is truly open for business.”
ABOUT REP. EDGARDO “SONNY” M. ANGARA
Rep. Edgardo "Sonny" Angara is the Chairman of the House Committee on Higher and Technical Education and Representative of the Lone District of Aurora, Philippines. Inquiries about Rep. Edgardo M. Angara may be directed to the House of Representatives Rm. N-305, Phone: 931-5001 local 7344.
