Burdensome and outdated tax

One thing is certain in the life of a Filipino traveler: the travel tax.

While travel is both a right and a privilege, it is also a costly undertaking for many. The amount that is collected by the Tourism Infrastructure and Enterprise Zone Authority (Tieza)—P1,620 for economy and business class, and P2,700 for first class passengers—is certainly no chump change. How many Filipinos have, in fact, felt burdened and wondered where these taxes go?

It is, thus, no small surprise that legislative proposals to abolish the tax were met with public support. The bid also recently received a much-needed boost when President Marcos included it among the 21 priority measures of the Legislative-Executive Development Advisory Council that he wants passed by June, before his fifth State of the Nation Address.

So far, 12 bills have been filed in the Senate and 21 in the House of Representatives, including one authored by the President’s son, Ilocos Norte Rep. Sandro Marcos. The proposals range from exemption of certain sectors, such as students, senior citizens, and persons with disabilities, to scrapping the tax altogether.

Additional travel tax

The travel tax was first imposed 70 years ago, in 1956, through Republic Act No. 1478, which created the Board of Travel and Tourist Industry. The fee was tiered, with a minimum of P7.50 for travel costing P60 and a maximum of P100 for travel costing more than P1,000. The money collected was used to fund the board’s activities, including “undertak[ing] the development of tourist attractions and provid[ing] and maintain[ing] essential facilities for tourists and travelers.”

In 1970, an additional travel tax of P300 was imposed on first-class passengers and P200 for the rest under RA 6141. A maximum of P2 million of the proceeds went to the board for the development and maintenance of Rizal Park, while the remaining funds were allocated to other public parks.

These taxes were eventually consolidated under Presidential Decree No. 1183 issued in 1977 as follows: up to 15 percent of the fare but not less than P2,000 for first-class and P1,250 for economy-class passengers, and P750 for the rest.

The President’s father, late President Ferdinand Marcos Sr., was behind all three laws.

In 2009, through RA 9593 signed by then President Gloria Macapagal Arroyo, Tieza took over the Philippine Tourism Authority as the mandated agency for collecting the travel tax. This law also states that 50 percent of the proceeds shall accrue to the Tieza, 40 percent to the Commission on Higher Education for tourism-related educational programs and courses, and 10 percent to the National Commission for Culture and Arts. In 2024, Tieza reported that it collected P7.8 billion from travel taxes.

Lucrative source of revenues

The Department of Finance has warned that abolishing the travel tax could result in revenue losses of as much as P5.1 billion. Per government data, 6.25 million people traveled out of the Philippines from January to October 2025, representing an 11.6 percent increase over the previous year. Indeed, the travel tax has become a lucrative source of revenues for the state. On the other hand, authors of the pending bills have commonly cited the following reasons for scrapping it: to ease the burden on Filipinos who are already weighed down by other taxes on income and consumption, and to align with the Association of Southeast Asian Nations Tourism Agreement of 2002, which calls for a phaseout of travel levies and travel taxes on nationals of member states.

Much of the unacceptability of the travel tax lies in how the public does not know how the proceeds are being utilized. This has been compounded by complaints about the poor state of the country’s airports. The improvements seen at the Ninoy Aquino International Airport terminals after they were turned over to a private consortium in 2024 only bolstered the public’s sentiments that the travel tax has not helped upgrade the travel experience and, therefore, it is pointless to continue to pay for it.

A burden and punishment

The bigger issue is how travel within the country continues to be a challenge due to the lack of connectivity and better facilities—that the travel tax was supposed to fund—making it a costlier undertaking compared to international travel. If the government wants to attract more foreign tourists and encourage Filipinos to travel domestically, it must build the infrastructure needed—bigger airport runways, for example, to accommodate larger planes that could help offset the cost of domestic travel.

Without tangible improvements that make travel more convenient—better roads and bridges, more comfortable airports, seaports, and bus terminals—Filipinos will continue to view the travel tax with skepticism and more as a burden and punishment rather than as their contribution to national development. But merely abolishing it could only end up as a populist move that does not address the real question: Where do our taxes go?