DOF plans to lower DST and abolish the travel tax

Published January 16, 2020, 12:00 AM

by manilabulletin_admin


The Department of Finance (DOF) said yesterday that the national government plans to reduce the rates of documentary stamp tax (DST) while at the same time eliminate the levy being imposed on Filipinos travelling abroad.

Finance Secretary Carlos G. Dominguez III said that the new DST regime was not originally part of the Duterte administration’s comprehensive tax reframe program (CTRP), but was “inserted” by the lawmakers during the bicameral conference committee (Bicam).

According to Dominguez, if members of the executive was allowed to participate during the Bicam deliberations, the DOF would have objected to the DST provisions under the tax reform for acceleration and inclusion act (TRAIN).

Among the DST provisions under TRAIN were the introduction of a tax on donations of real property, increase in tax on loan agreements and doubled rates on specific taxable transactions.

“The increase in the DST tax was not part of the tax reform program, it was inserted during the Bicam. During the time when you have a Bicam the DOF was not allowed to speak so that was inserted and unfortunately we were unable to register our objection on that,” Dominguez said.

For this reason, the finance chief said “It’s not part of our program. We will attempt to reduce it in the future.”

But when asked if the reduction in DST could be immediately passed by Congress, Dominguez replied “Our process for legislation is long and tedious and I can’t promise it now.”

Meanwhile, Dominguez said that they are also looking at eliminating the 60-year-old travel tax — one of the oldest taxes in the country — being collected by Tourism Infrastructure and Enterprise Zone Authority (TIEZA).

“The travel tax is in place and definitely we will look at its elimination,” Dominguez told reporters, noting he also had a recent meeting with TIEZA officials where they discovered the ₱14 billion in the agency’s account.

“I told them if they don’t spend it, I will take it away. I agree that TIEZA has to move faster or the travel tax will be eliminated,” he added.

Currently, the government collects a travel tax from all Filipinos residing in the Philippines. For economy class Filipino passengers, the tax is ₱1,620, while ₱2,700 is being collected from first class passengers leaving the country.

The revenues from travel taxes were intended to be spent on tourism-related educational programs as well as to Commission on Higher Education and the National Commission for Culture and the Arts.

Travel tax was introduced almost 60-years as “a tool to restrict foreign travels and encourage domestic tourism into becoming a major contributor to the government’s tourism-related projects and programs.”