Philippines scraps foreign carrier tax to boost tourism

MANILA (dpa) – The Philippines is scrapping a carrier tax imposed on foreign airlines operating in the country to try to attract more tourists, the government said Thursday.

President Benigno Aquino III signed a law removing the three per-cent tax imposed on receipts derived from transporting passengers, presidential spokesman Edwin Lacierda said.

The law also exempts foreign airlines from a 2.5-per-cent tax on their gross reve-nues if their home countries also extend the same incentive to Philippine airlines.

“This will reduce the prices of tickets, bring more tourists to the Philippines and generate significant job-creating activity for our tourism industry,” Lacierda said.

The government was expected to lose an estimated 40 million dollars in revenues because the law.

Last year, 4.3 million foreign tourists visited the Philippines, up nine per cent from 2011, but the figure was below the government’s target of 4.6 million visitors.

The Tourism Department has set a goal to achieve 10 million foreign arrivals by 2016.