Gov’t urged to expand tax exemption for travels to BIMP-EAGA destinations

Francisco Bangoy International Airport in Davao City. MindaNews file photo by BOBBY TIMONERA

DAVAO CITY (MindaNews / 11 May) – Government must abolish travel taxes for travelers from Mindanao and Palawan going to any destination in the Brunei Darussalam-Indonesia-Malaysia-Philippines East ASEAN Growth Area (BIMP-EAGA) “to encourage everybody to travel and learn in the process,” Davao City Chamber of Commerce and Industry Inc. president Arturo Milan said Friday.

President Duterte signed on May 8 a memorandum order renewing his predecessor’s policy of granting travel tax exemption for travelers from Mindanao to certain destinations in the economic sub-region.

“We, at the Davao City Chamber of Commerce, welcome the exemption of paying travel tax to the BIMP countries. This will surely encourage tourism and people mobility within the BIMP countries and strengthen our cultural, social and economic relations,” Milan said.

Romeo Montenegro, director investment promotion and public affairs of Mindanao Development Authority, said a similar memorandum circular issued during the Aquino administration expired in October 2017.

He said the tax exemption covers only the BIMP-EAGA focus areas: the entire sultanate of Brunei Darussalam; provinces of Kalimantan, Sulawesi, Maluku, West Papua and Papua in Indonesia; states of Sabah and Sarawak and the federal territory of Labuan in Malaysia; and Mindanao and the province of Palawan in the Philippines.

International flights from Davao City International Airport include Kuala Lumpur, Malaysia serviced by AirAsia, Singapore by SilkAir, and one chartered flight to Manado, Indonesia.

Montenegro explained the travel tax exemption only applies for trips to any BIMP-EAGA focus area because “the trip is relevant and is related to movements within BIMP-EAGA,” for example, when travelers are flying to Kota Kinabalu, the capital of Sabah, via Kuala Lumpur.

Mindanao Business Council chair Vicente Lao said he believes the exemption will boost tourism in BIMP-EAGA areas.

The memorandum order cited that the tax exemption policy was recommended by the House of Representatives in House Resolution 78 dated December 6, 2017.

It said it was in line with “the national interest” and meant “to sustain and accelerate economic development in Mindanao and Palawan.”

It said the exemption will be granted for a period of five years from its date of effectivity.

Travelers will have to secure a travel tax exemption certificate from the Tourism Infrastructure and Enterprise Zone Authority, it said.

The order tasked the National Economic Development Authority, in coordination with all relevant government agencies to conduct an impact study on the implementation of the memorandum order and submit an annual report to the Office of the President for the purpose of determining whether the exemption should be continued or revoked. (Antonio L. Colina IV/MindaNews)