European business backs Philippines open skies but not taxes on foreign carriers

European Chamber of Commerce of the Philippines welcomed the government's plan to implement an open-skies policy but said the taxes on foreign carriers should be lifted to allow the entry of new players (The Manila Times/Manila Bulletin, 13-Jan-2011). ECCP executive vice president Henry Schumacher said the taxes and their regulations are not consistent with international standards and practice, making the Philippines the most expensive investment destination for airlines in the ASEAN region. The tax regime consists of common carriers tax (CCT) of 3% of gross receipts and Gross Philippine Billings (GPB) tax of 2.50% of GPB or an aggregate taxation on their gross revenue of 5.50%. The government earns USD73 million (PHP3.2 billion) annually from the CCT and GPB tax.

ECCP: "Philippine international carriers are not subject to these types of taxes in the routes where they compete with foreign airlines. This discrimination contravenes the principles of the International Civil Aviation Organisation to which the Philippines is a signatory,". Henry Schumacher, executive vice president. Source: Manila Times, 13-Jan-2011.