Scrap CCT
Government, we love to say here, is about making things happen for the people, getting the job of nation building done.

But it’s amazing to realize that sometimes the way to make things work is to undo them: Reduce or remove them altogether.

Take taxation. We realize government needs to maximize revenues in order to finance basic services and development projects. This it can do simply by improving collection efficiency, not by introducng more taxes.

But it can do better than that. Government can cut taxes or scrap some of them altogether. Doing so would free up cash into the system which would be spent by consumers, thus perking up the skittish economy.

This option is even made more compelling because the government confirmed that the country’s gross domestic product slowed to 3.7 percent last year.   

Now, just consider one impost alone – the common carrier’s tax.

Sen. Ralph G. Recto yesterday said the passage of a proposed measure eliminating CCT on international carriers would boost tourist arrivals by 70,000 more on the first year and help create 70,000 new jobs.

Recto urged President Aquino to certify as urgent his proposed measure to speed up its congressional approval.

He said the enactment into law of the measure would easily increase passenger traffic, inbound and outbound, by 230,000 just in the first year of the “demise” of the CCT.

The chairman of the Senate ways and means committee pointed out that the increased tourist arrivals and passenger traffic, citing figures from the International Air Transportation Association, would generate potential revenues of $45 million for every tourism dollar spent in the country.

He said new jobs being created with influx of more foreign airlines loaded with tourists from all over the globe would also translate into $214 million in annual employee compensation or salaries.

Recto said the estimated tourism tax revenues could be at the vicinity of $5.40 million a year with export earnings accelerating by $1 billion.

“Those opposed to the scrapping of the CCT are trumpeting a tax revenue loss of P1.875 billion a year, but  the figures of IATA on  ‘tourism receivables’ should be a no-brainer,” he said, stressing that the “pluses” far outweigh the “minuses.”

The country remains as the only state that imposes a CCT at three percent of gross receipts and 2.5 percent on its gross Philippine billings on all cargo and passenger revenues originating from the country.

Such tax imposition has turned off many foreign airlines and shipping companies that some have dropped the country from its roll of destinations.

“The approval of this bill seeks to end the exodus of foreign carriers from the country and in turn promote the progressive development of existing air and shipping carriers —gaining more tourists and sending more packages for exports,” Recto said in his Senate Bill 3065.

His committee is set to hold its maiden hearing on the said bill this coming Thursday to drum up Palace support on its passage.