IATA chief urges Philippines to scrap carrier tax
MANILA, Philippines - A visiting airline association executive called on President Aquino anew to remove tax burdens imposed on foreign airlines.
In a press briefing on Thursday, September 27, Tony Tyler, Director General and Chief Executive Officer of the International Air Transport Association (IATA) said he will renew his earlier call on the government to remove the Common Carrier Tax (CCT) and Gross Philippine Billings (GPB).
He said he will mention this again when he meets with President Aquino during his Philippine visit. Tyler said he will stress that scrapping these tax burdens would mean a potential gain of up to $78 million for the wider Philippine economy from increased tourism and there would be a positive impact on cargo and exports as well.
“I will be urging the President to keep a watchful eye over excessive tax burdens on air transport. For example, elimination CCT and GPB will create ‘win-win’ opportunities by lowering the total cost of international passenger travel by 2.5%, and increasing the number of international arrivals and departure in the Philippines by 1.9%,” he said.
IATA has been working closely with the Board of Airline Representatives in the Philippines on this issue. Tyler said he already wrote to President Aquino earlier this year to bring his attention to the urgency of eliminating these taxes.
“We are making some progress on long-standing tax issues. But to be really effective, the Philippines must get to global standards on safety oversight and provide the air transport infrastructure needed to welcome growth and development. I hope that newly appointed Secretary for Transport, Joseph Emilio Abaya, will make aviation a priority,” said Tyler.
IATA will also suggest to President Aquino to make IATA Operational Safety Audit (IOSA) and the IATA Safety Audit for Ground Operations (ISAGO) as requirements to operate in the Philippines at no cost to the government.
IOSA is one of IATA’s safety programs and is being used by its member airlines, including PAL. Tyler said that the safety performance of airlines under IATA stood 52 percent better than that of those airlines not on the registry. “So, IOSA makes a positive difference. IATA does not produce banned lists or rankings,” he said, referring to the Philippines’ category 2 status from the US Federal Aviation Administration.
The FAA downgraded the Philippines in 2008 after a safety audit conducted in November 2007 that found a total of 23 deficiencies in the Philippines’ air industry regulations. Thus, the country was placed in Category 2 status, which means that all local airlines are barred from expanding operations in the United States.
Soon after, the European Union also raised significant safety concerns that resulted in the banning of Philippine carriers from landing in European airports.
“I will be urging the President to personally intervene to sort this out. IATA certainly stands ready and willing to help. IATA has been providing support to improve the safety and efficiency of the air traffic management through observation programs of air traffic control (ATC), training for Civil Aviation Authority of the Philippines (CAAP) personnel and development of procedures to improve operational efficiency. We have also facilitated working groups to identify airport safety hotspots and review ATC procedures,” added Tyler.
Overall, aviation in the Philippines is lagging behind compared to neighboring countries. He said the country is missing out on great economic opportunities that could be facilitated by air transport. This is because the industry has been neglected by successive governments and the result is that “aviation in the Philippines has a bad reputation for safety, inadequate airport capacity and high taxation. It’s time for change,” said Tyler.
Aviation is an important contributor to the Philippines’ economy. It supports P35.5 billion of economic activity in the country and created some 123,000 jobs.
“It’s time now for the government to get a strong grip of the issues and sort them out. It will take time of course…a plan needs to be developed and work that plan,” added Tyler.
IATA is a group that represents 240 airlines around the world. - Rappler.com