Senate eyes abolishing travel tax, other tax reforms this year

The Senate is looking to abolish the travel tax within the year, with Senate President Sherwin Gatchalian saying the measure will be among the chamber's tax reform priorities.

Speaking at a Management Association of the Philippines forum on Thursday, Aug. 20, Gatchalian said the bill seeking to remove the travel tax, which has already passed the House of Representatives, will be discussed by the Senate soon, with lawmakers targeting its passage before the end of the year.

“Ang revenue loss niya, estimate, is almost around P6 billion. We think that it will be offset by the growth in the tourism industry,” Gatchalian said.

The proposal would remove the additional tax paid by passengers leaving the Philippines, reducing the cost of international travel for Filipinos and other covered travelers.

The proposed abolition is part of a broader set of tax reforms being considered by the Senate. Gatchalian also identified the general tax amnesty bill and the GINHAWA bill as among the chamber's priorities.

The GINHAWA bill seeks to increase the income tax exemption threshold to cover individuals earning up to P400,000 annually, higher than President Ferdinand Marcos Jr.'s proposed P350,000 threshold.

Gatchalian likewise expressed support for scrapping the value-added tax imposed on system losses, with the eventual goal of removing system loss charges altogether.

He also said lawmakers are considering changes to other taxes to make up for the revenue that could be lost, including possible increases in taxes on alcohol, cigarettes, and vapes.

Meanwhile, Gatchalian said the Senate remains on track to review the proposed 2027 national budget, with budget hearings set to begin next week. Lawmakers are expected to hold hearings on Thursdays, Fridays, and Saturdays as they work toward completing the budget process before the end of the year.