This paper examined the impact of the COVID-19 pandemic on the collection of travel tax. The COVID-19 pandemic has deterred the international travel of Filipinos due to travel restrictions and lower passenger confidence, which likewise resulted in the drastic decline of the travel tax collection in 2020, thereby, affecting the budget and funding requirements of the government agencies benefitting from the travel tax collection.
Fifty percent of the proceeds from the travel tax is allocated to the Tourism Infrastructure and Enterprise Zone Authority (TIEZA) for its infrastructure projects, capital outlays, and administrative expenses. At the same time, 40% goes to the Higher Education Development Fund of the Commission on Higher Education (CHED). The remaining 10% goes to the National Endowment Fund for Culture and the Arts, being maintained by the National Commission for Culture and the Arts (NCCA) to support, preserve, conserve, and protect the Philippine historical and cultural heritage.
The COVID-19 pandemic had a lingering effect on the tourism industry. With the expectation that a rebound in international tourism will not happen before 2023, it is, therefore, important that the present structure of the travel tax, both as to rates and coverage, is not diminished by any expansion of exemption and/or grant of discount so as not to further deplete the revenue stream from the said tax. Otherwise, tourism-related programs and projects of the TIEZA, CHED, and NCCA would likewise be unduly affected.