Foreign airlines are forcing the Philippines’ Department of Finance to reduce the 2.5% Gross Philippine Billings Tax (GPBT) and the 3% Common Carrier’s Tax (CCT) to which they are subjected. The GPBT and CCT are levied on all revenues, passengers, cargoes and excess baggage leaving the Philippines.
Foreign airlines are pushing to take the already approved bill by the House of Representatives Committee on Ways and Means on tax exemptions for international air carriers under tax treaties and international agreements signed by the Philippines in full parliamentary session.
The airlines have also appealed to President Aquino either to instruct the Department of Finance and the Bureau of Internal Revenue (BIR) to provide either for such tax relief, or to encourage the passage of the bill through parliament.
Though it has been projected by the airlines how an exemption from paying the GPBT and CCT by the international air carriers would add considerably to the country’s export earnings in Philippines, yet the Finance Department counter argued that such an action would cost the BIR loss of some PHP2.5bn (USD57.5m) amount of annual revenue.
