Govt. & Taxes, Philippines

Tuesday, August 08, 2006

Domestic air travel taxes

Early August this year, I travelled to Bacolod City and back in Manila. I always take Cebu Pacific Air because the fares are generally cheaper compared to the dominant airline, PAL. Cebu Pacific gives some promos. For instance, its Manila-Bacolod one-way fare can be as low as P568.00 only. But the taxes and surcharges are almost double this amount, P1,042.56!
The latter is composed of:
a) fuel and insurance surcharge, P870.00
b) value added tax (VAT), P172.56

As I have discussed earlier on VAT, the 12% VAT is:

1. A tax on fuel surcharge, which by itself, is already slapped with various taxes (import tax, excise tax, corporate income tax, real property tax and various business registration fees to the municipal/city governments.

2. A tax on insurance surcharge, which by itself is ...