The proposed abolition of the Philippines’ travel tax could leave the Tourism Infrastructure and Enterprise Zone Authority (TIEZA) without a dedicated funding source for tourism infrastructure projects in 2027, putting projects in its pipeline at risk.
During the agency’s budget hearing on September 28, TIEZA chief operating officer Mark Lapid said about 94 to 95 per cent of the agency’s operating funds come from the travel tax. TIEZA has no allocation for its projects under the proposed 2027 national budget.
“With the current fiscal situation, our agency will have some difficulty – not only us, but the tourism industry when it comes to infrastructure support,” Lapid said.
Lapid clarified that TIEZA is not opposed to abolishing the travel tax but appealed to senators for a transition period. He said extending the collection of the levy would allow TIEZA to continue carrying out its mandate while an alternative source of funding is determined.
TIEZA’s projects include the rehabilitation of local airports and tourism sites such as Boracay, Siargao and Burnham Park in Baguio City.
The abolition of the travel tax is among the priority measures of the administration of president Ferdinand Marcos Jr. In August, Senate president Win Gatchalian said the Senate expected to approve a measure abolishing the tax within the year.
The full travel tax is 1,620 pesos (US$28) for economy- and business-class passengers and 2,700 pesos for first-class passengers, although exemptions and reduced rates apply to eligible travellers.
The Philippines is the only country in South-east Asia that continues to impose a travel tax.
Earlier this year, the Philippine Hotel Owners Association raised concerns over proposals to abolish the travel tax, saying its removal could affect funding for tourism development.
