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Republic of the Philippines > ont MAR 3 Tha
HOUSE OF REPRESENTATIVES \ "ME
Queson City “3, PY.
‘a =
SEVENTEENTH CONGRESS i

‘Second Regular Session

HOUSE BILL NO.

Introduced by HON. LUIS RAYMUND “LRAY” F. VILLAFUERTE, JR.

EXPLANATORY NOTE

Tourism in the country is a growing force in the Philippine economy. The industry has
contributed a total of P2.85 trillion to the local economy in 2016, almost 20% of the
country’s gross domestic product’. Last year, the Department of Tourism (DOT)
recorded over 6.6 million tourist arrivals in the country, posting an 11% growth from
the year prior. The industry started 2018 with a strong rise of 16% in tourist arrivals
in January? and the DOT is looking forward to a consistent rise in the coming months.

The bill proposed intends to build on the growth of the tourism industry in the
Philippines by generating funds for the improvement of tourist welfare services in the
country. A fixed rate of 25 USD will be collected from tourists traveling to the
Philippines and staying for less than sixty (60) days. A list of exempted persons is
provided herein, including those in the country on a work visa and tourists staying the
country for more than 60 days in order to encourage long staying, high spending
tourists.

Currently, our government imposes a travel tax on Filipinos traveling abroad without a
similar imposition to foreigners traveling to the Philippines; while our neighboring
states tax foreigners flying into their countries. The fixed rate of $25 is proposed to be

* hitp:/Mbusiness. inquirer. ne/226547/travel-tourism-sector-adds-p2-8St-ph-gdp
2 http://newsinfo.inquirer.net/965347/dot-records-6-6-million-foreign-tourists-in-2017
> https://businessmirror.com.phtourism-industry-off-to-strong-start-this-year-as-january-arrivals-rise-16/



competitive with that of the current taxes other countries have set. This is mainly based
on the average rates of entry and exit taxes imposed by Asian countries such as
Thailand, Indonesia, Brunei, Sri Lanka, Cambodia, Hong Kong and China. The
collection of entry and exit taxes has been imposed by other countries on visiting
foreign nationals in order to boost the funding for tourism. This is more commonly
collected from travelers flying into a country, where the fee is incorporated into the
airline ticket price. In this proposed bill, we follow the same standard of including the
Tourist Welfare Tax, as it will be called, in the airfare prices.

The proposed collected fee will be used to improve the tourist welfare services such
as existing and ensuing Tourist Information and Assistance Desks, the Tourist Police
training and development program, specialized tourist programs for persons with
special needs and persons with disabilities. The funds collected will be allocated to the
Department of Tourism for the development of tourist welfare services and the Tourism
Infrastructure and Enterprise Zone authority for the improvement of services in tourism
infrastructure. The Tourist Welfare Tax will also be allocated to the tourism offices of
Local Government Units to encourage the development of local tourism programs.

A provision for the adjustment of the tax 5 years after the effectivity of this Act is
provided in anticipation of possible inflation. A tax refund option is also available for

those erroneously charged and tourists who have spent over 10,000 US dollars in
tourism receipts.

The approval of this bill is earnestly sought.

Luis MUN! RAY” F. VILLAFUERTE, JR.


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Queson City

SEVENTEENTH CONGRESS
Second Regular Session

HOUSE BILL NO. uag34

Introduced by HON. LUIS RAYMUND “LRAY” F. VILLAFUERTE, JR.

AN ACT
IMPOSING THE COLLECTION OF A TAX ON FOREIGN VISITORS IN THE
COUNTRY FOR THE PURPOSE OF GENERATING FUNDS FOR TOURIST
WELFARE SERVICES

Be it enacted by the Senate and House of Representatives of the Philippines
in Congress assembled:

SECTION 1. Short Title. — This Act shall be known as the “Tourist Welfare Tax Act
of 2018”

SECTION 2. Declaration of Policy. - The State declares tourism as an
indispensable element of the national economy and an industry of national interest
and importance, which must be harnessed as an engine of socioeconomic growth
and cultural affirmation to generate investment, foreign exchange and employment,
and to continue to mold an enhanced sense of national pride for all Filipinos.

The State shall seek to recognize sustainable tourism development as integral to the
national socioeconomic development efforts to improve the quality of life of the
Filipino people, providing the appropriate attention and support for the growth of this
industry.

SECTION 3. Objectives. — Pursuant to the above declaration, the State shall adopt
the following objectives:


1. Promote improved tourist services in the country and tourism awareness
among Filipino nationals;

2. Provide adequate tourist services to visiting foreign nationals by improving
ports of entry and exit in the country;

3. Promote security for visiting foreign nationals and Filipino nationals through
transportation and road developments, improved emergency services, and
training and development of tourist police;

4. Ensure that general well-being and welfare of visiting foreign nationals is
promoted; and

5. Develop specialized tourist services for persons with special needs and
persons with disabilities.

SECTION 4. Definition of Terms. — For the purposes of this Act, the following terms
shall refer to:

a) Tourist Tax — shall refer to the tax imposed on foreign visitors to the country,
as provided in this Act;
b)

Foreign Visitor — shall refer to any person who is not a Filipino citizen or not a
permanent resident and have been issued a Temporary Visitor's Visa or a
9(a) visa for restricted foreign nationals. Unrestricted foreign nationals are
allowed travel to the Philippines without an entry visa for a thirty (30) to fifty-
nine (59) day period, depending on the visitor's country of origin;

°)

Operator — shall refer to the company, entity, proprietor or management of the
airline operating flights to and from the Philippines, whether domestic or
international,

SECTION 5. Tourist Welfare Tax. - There is imposed a tourist tax, hereby known
as the Tourist Welfare Tax, on all foreign visitors of the Philippines visiting the
country for tourism and leisure and staying in the Philippines for a period of not more
than sixty (60) days. The Tourist Tax to be imposed shall be a fixed rate of twenty-
five ($25.00) US Dollars per foreign visitor or passenger and shall be integrated into
airline ticket prices.


The tourist tax imposed shall be reflected in official receipts issued by the operator
and the operator shall be tasked to account for the tourist tax payments in their
books.

SECTION 6. Exemption from Payment of Tourist Tax. - The following shall be
‘exempt from the payment of the travel tax imposed under Section 3 of this Act:

a) Foreign visitors in the country engaging in official business and have been
issued a Work Visa or Work Permits;

b) Foreign visitors in transit to another destination and have not stayed in the

country for more than twenty-four (24) hours;

Foreign visitors travelling in the country for more than sixty (60) days but not

more than one hundred eighty (180) days;

d) A foreign retiree with a valid Special Retiree's Resident Visa issued by the

°)

Bureau of Immigration;
) Overseas Filipino Workers returning to the country permanently or for
vacation;
f) Foreign students in the country for excursion or immersion and have been
issued a Student Visa;
Persons With Disabilities;
Children under the age of twelve (12) accompanied by a guardian or adult and
those under the age of fifteen (15) who have secured a Waiver of Exclusion
Ground (WEG) from the Bureau of Immigration and allowed admission to the
country; and
i) Officials and heads of foreign States visiting the Philippines.

9)
h)

SECTION 7. Operator as Withholding Agent. — All domestic carriers and
international carries with flights to the Philippines are hereby mandated to
incorporate the tourist tax into the cost of flights flying to any port of entry in the
country and oversee the collection of the tourist tax accordingly. The operator shall
therefor register with the Bureau of Internal Revenue as the withholding agent and
remit the tourist tax collected, as mandated by the National Internal Revenue Code
(NIRC), as amended.


Any operator required to withhold, account for, and remit the tourist tax provided in
this Act, or willfully fails to withheld such tax shall, in addition to other penalties
provided for in the NIRC, be liable upon conviction to a penalty equal to the total
amount of the tax not withheld, or not accounted for and remitted. Likewise, any
person who aids or abets in any manner to evade any such tax or the payment
thereof shall be liable upon conviction to a penalty as provided in the NIRC.

SECTION 8. Refund of Tourist Tax. — Any person who has erroneously paid or
overpaid any tourist tax charged against them may lay claim thereof within three (3)
years from the time the erroneous payment or overpayment occurred. The refund
thereof may be filed at any Tourism TIEZA or Department of Tourism (DOT) offices,
satellite or Central.

Foreign visitors who have spent more than ten thousand ($10,000.00) US dollars, or
its equal in Philippine pesos, in purchases of goods and services with DOT
accredited tour operators shall also be entitled to a refund of the tourist tax and may
lay claim thereof, as provided above.

SECTION 9. Tax Adjustment. — The rate of the tourist tax imposed shall be
reviewed every five (5) years from effectivity of this Act by the Department of
Tourism, Department of Finance and the Bureau of Internal Revenue for inflation.

SECTION 10. Disposition of Tax Collected. — All funds collected shall be allocated
as follows:

a) Thirty percent (30%) of the tax collected shall be allotted to the Tourism
Development Fund to fund Tourist Welfare service such as existing and
ensuing Tourist Information and Assistance Desks, the Tourist Police training
and development program, specialized tourist programs for persons with
special needs and persons with disabilities, and other tourist welfare
programs set by the Department of Tourism;

Forty percent (40%) of the tax collected shall be for use by the Department of
Tourism to enhance its programs for improved services in airports and ports,
road development projects through the Tourism Road Infrastructure Program,

b)


transportation development programs, and the improvement of the emergency
response capability of the country; and

©) Thirty percent (30%) of the tax collected shall be allocated to the tourism
infrastructure programs of Local Government Units to encourage the
development of local tourism programs.

SECTION 11. Role of National Agencies. — The Department of Tourism, together
with Tourism Infrastructure and Enterprise Zone Authority (TIEZA), and the Bureau
of Internal Revenue shall coordinate and supervise the implementation of the Tourist
Tax.

SECTION 12. Role of Local Government Units. — Upon the effectivity of this Act,
Local Government Units are hereby mandated to devise a five (5) year local tourism
development plan, which shall include the adoption of measures that are geared
towards the safety, security and welfare of tourists.

SECTION 13. Implementing Rules and Regulations. — The Secretaries of the
Department of Tourism, Tourism Infrastructure and Enterprise Zone Authority,
Department of Finance and the Bureau of Internal Revenue shall jointly promulgate
within thirty (30) days from the effectivity of this Act, the implementing rules and
regulations to carry out the intent, objectives, purposes, and provisions of this Act,
including such structural and procedural improvement in the systems and agencies
concerned as may be necessary to ensure the prudent, wise, effective, and efficient
utilization of the fund established.

SECTION 14. Repealing Clause. All laws, executive orders, rules and regulations or
parts thereof inconsistent with any provision hereof are hereby repealed or modified
accordingly.

SECTION 15. Separability Clause. |f any provision or part hereof is held invalid, the
other provisions not affected thereby shall remain and continue to be in full force and
effect.


SECTION 16. Effectivity. This Act shall take effect fifteen (15) days after its
publication in the official gazette or in any newspaper of general circulation.

Approved,