PH tax on tourists? It may hurt arrivals – NTRC

Image from Department of Tourism
  • PH tax research center not okay with proposals on taxing foreign tourists
  • It said increased levies may hurt tourist arrivals, ultimately dampen gov’t revenues
  • Body also advised the gov’t to wait PH’s tourism arrival numbers catch up with ASEAN peers

MANILA, Philippines – The government’s tax research body has advised against imposing taxes on foreign tourists, saying the additional levies may hurt the number of arrivals and stifle revenue in the long run.

According to the National Tax Research Center (NTRC), while a “foreign tourist tax” would help raise funds at the onset, such a windfall would only be felt for a short while as foreign nationals may be dissuaded from visiting the country.

“It is a known fact that a tax imposed on any sector can somehow stifle growth especially if said tax is excessive,” the Philippine Daily Inquirer quoted the NTRC as saying. “Moreover, the proposed tax may dampen the country’s tourism industry and consequently derail all efforts of the government in promoting the country as a premier tourist destination. The possibility of government not attaining its projected tourist arrivals until 2022 is likewise not farfetched.”

The NTRC added that levying the tax which would only be imposed on foreign nationals visiting in the country for vacation or leisure purposes pose a logistics problem for the government.

“The proposal may also be difficult to administer considering that the purpose of tourists traveling to the country may vary. There are those that visit the country for medical treatment, official trip/mission, pilgrimage, potential business venture, among others. Said travelers are not the target of the proposed tax but those who are traveling to the country for leisure and/or vacation purposes,” it said.

For now, the NTRC advised the government to conduct further studies and wait for the number of tourist arrivals in the Philippines to be on par with other members of the ASEAN.