The Board of Airline Representatives (BAR), the association of foreign and local airlines in the Philippines, welcomed the signing into law recently by President Benigno S. Aquino III of RA No. 10376 that repeals the common carriers tax and the Gross Philippine Billings in support of the targets of Philippine tourism.
Foreign carriers – both air and shipping – will be exempted from paying the burdensome common carriers tax imposed on passenger traffic. Carriers will also be VAT exempt for the transport of passengers. As regards income taxes, foreign carriers will be exempt from paying them on the basis of tax treaties or any international agreements or simply based on reciprocity.
According to Steven Crowdey, First Vice-Chair of the BAR, “We thank and congratulate President Aquino for this landmark reform in Philippine tourism and aviation, for believing in the potentials of these two interdependent industries to serve as catalyst to sustained growth. We likewise thank Senator Franklin Drilon and Representative Isidro Ungab of the Ways and Means Committees of Philippine Congress who made this reform happen under the current Congress. This enabling law makes the Philippines a more competitive destination in the region. We now look forward to a partnership with the completion of major airport infrastructure projects that will expand capacity.”
The BAR acknowledges the support of both Secretaries Ramon Jimenez Jr. and Cesar Purisima who pursued public-private partnership in addressing the issues of the industry and in endorsing the bill to Philippine Congress and to the President.
The legislative measure was certified as urgent last Dec. 19, 2012. The bicam conference chaired by Senator Drilon was successfully concluded last Jan 23, 2013. The bicam report was ratified on the same day by both Houses. The enrolled bill was endorsed to the Office of the President for his signature last February 6. This legislation is a major action program under the National Tourism Development Plan of 2011-2016 and in support of the target of 10 million international tourists and 7 million jobs.