EXPLAINER: Why Do We Have to Pay Travel Tax?

(SPOT.ph) Travel tax is one of those charges you don’t really think about. It shows up at checkout, you pay it, and you move on—not because it’s easy to shrug off, but because we have no other choice if we want to fly out of the country.

That system dates back to the late 1970s, when the travel tax was introduced under the administration of Ferdinand Marcos Sr. through a presidential decree. The idea was for people leaving the country to help fund tourism development, creating a steady source of money for tourism infrastructure and other related programs without tapping into the general budget. Today, the setup remains largely the same, with the tax fixed at P1,620 for economy-class passengers and P2,700 for first-class passengers.

The Philippines is the only ASEAN country that still imposes this kind of tax on outbound travelers. What’s even more interesting is that it doesn’t go to airport staff, immigration counters, or airline operations as one might assume (those are covered by other fees bundled in your ticket).

So where does the money actually go? Let's take a look at Section 73 of Republic Act No. 9593.

Also read: PSA: Travel Tax Is Now Required for the eTravel

Half of everything collected goes to the Tourism Infrastructure and Enterprise Zone Authority (TIEZA), where we pay our travel tax. This is the agency under the Department of Tourism that handles tourism-related infrastructure. In plain terms, this means roads leading to tourist spots, ports and facilities in tourism areas, government-owned tourism properties, and other basic projects meant to make travel around the country easier and safer.

Another large chunk at 40% is automatically sent to the Commission on Higher Education (CHED). This part surprises a lot of people. Travel tax helps fund tourism and hospitality education in the Philippines—things like scholarships, training programs, and support for colleges offering tourism-related courses. The idea is simple: if tourism is a major industry, the people working in hotels, resorts, airlines, and tour services should be properly trained for the job.

The remaining 10% goes to the National Commission for Culture and the Arts (NCCA). This share supports cultural programs, heritage conservation, and projects that help preserve Filipino traditions and art. In theory, this helps protect the very culture that attracts visitors to the country in the first place.

Whether the travel tax has actually led to visible improvements is another question.

For Filomeno Sta. Ana III, coordinator of Action for Economic Reforms, the issue isn’t so much that people are paying it—he said Filipino travelers have generally been willing to shoulder the fee. What matters more is how the money is actually being used.

Eleanor L. Roque, tax principal at P&A Grant Thornton, echoed the same concern: it’s hard to point to clear improvements in tourism that can be directly linked to its collection.

“The government has been collecting travel tax since 2009 when it was approved but we have not seen any substantial improvement in tourism because of it,” Roque was quoted as saying.

It’s partly why the travel tax keeps coming up for review. In recent months, several versions of proposals to adjust or remove the tax have been circulating in the Senate (there's Senate Bill No. 88 to exempt economy-class passengers, as well as Senate Bill No. 1409 and Senate Bill No. 1529 to remove the tax for all travelers). However, the Department of Finance (DoF) has previously warned that abolishing the travel tax could result in around P5.1 billion in lost revenue. Lawmakers backing the various bills maintain that government funding for TIEZA, CHED, and NCCA should continue—but not at the expense of Filipino travelers.

Also read: Skip the Lines: You Can Now Pay for Travel Tax Online in Less Than Two Minutes