Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

EIGHTEENTH CONGRESS
First Regular Session

HOUSE BILL No. 1254

Introduced by HONORABLE LUIS RAYMUND 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

http://business.inquirer.net/226547/travel-tourism-sector-adds-p2-85t-ph-gdp

+ http://newsinfo.inquirer.net!965347/dot-records-6-6-million-foreign-tourists-in-2017

» https://businessmirror.com.ph/tourism-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.

Aprovision 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.

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LUIS; MUND F. VILLAFUERTE, JR.


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

EIGHTEENTH CONGRESS
First Regular Session

HOUSE BILL No. 1254

Introduced by HONORABLE LUIS RAYMUND 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 fiftynine (59) day
period, depending on the visitor's country of origin;

C) 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 twentyfive ($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;

C) 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;

8) Persons With Disabilities;

h) 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.

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 pott 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 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. If 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,

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