PAL TRAVEL TAX EXEMPTION VIA TIEZA A Philippine Legal Overview (2025)
1. Statutory Foundation of the Philippine Travel Tax
| Measure | Date | Key Provisions on Travel Tax |
|---|---|---|
| Presidential Decree No. 1183 | 26 Aug 1977 | Imposes a travel tax on (a) Filipino citizens, (b) permanent resident aliens, and (c) non-immigrant aliens who have stayed in the Philippines > one year, whenever they leave the country, “regardless of the place of ticket purchase or form of payment.” |
| PD 1706 (1980) & PD 1932 (1984) | — | Expand covered persons and direct airline collection of the tax. |
| Executive Order 283 (Aquino, 31 July 1987) | — | Standardises rates and exemptions; vests administrative control in the Philippine Tourism Authority (PTA). |
| Republic Act 9593 (Tourism Act of 2009) | 12 May 2009 | Converts PTA into the Tourism Infrastructure and Enterprise Zone Authority (TIEZA) and re-confirms its mandate to collect, administer, exempt, and refund the travel tax. |
| TIEZA Board Resolutions & IRRs (2010 - 2024) | — | Issue/adjust operational rules, purely administrative but binding on airlines. |
2. Current Travel-Tax Matrix (2025)
| Passenger Category | First/Business Class | Economy / Lower | Note |
|---|---|---|---|
| Regular Rate | ₱2,700 | ₱1,620 | PD 1183 §3; EO 283 |
| Standard Reduced (PTR) legitimate spouse & unmarried children (12-21) of OFWs |
₱400 | ₱300 | TIEZA Memo 05-2012 |
| Children 2-11 y.o. | 50 % of adult rate | 50 % | EO 283 |
| Infants < 2 y.o. | – | – | Fully exempt |
| Travel-Tax-Exempt (TEC) groups | 0 | 0 | See § 3 below |
These figures have remained unchanged since 01 Jan 1998. Any change requires TIEZA board approval and DOF concurrence.
3. Statutory & Administrative Exemption Classes
Under PD 1183 § 2—as repeatedly expanded by EO 283, RA 9295, subsequent PTA/TIEZA circulars, and most recently TIEZA Board Res. 20-12 (2020)—a Travel-Tax Exemption Certificate (TEC) may be issued to:
- Overseas Filipino Workers (OFWs) carrying a valid Overseas Employment Certificate (OEC) or digital POPS-BAM exemption tag.
- Permanent migrant workers’ dependants who qualify for the PTR (reduced), see § 2.
- Foreign diplomatic officials and their dependants accredited by DFA.
- United States military personnel on temporary duty in the Philippines under the Visiting Forces Agreement (VFA).
- Seafarers (“OFF-signers”) departing to join ships abroad, with POEA contract.
- Airline crew on official duty, including PAL cockpit and cabin crew.
- Infants (< 2) and transit passengers who will depart within 24 hours.
- Philippine-government-funded scholars, athletes, artists, or humanitarian workers travelling on official mission (DFA-certified).
- Balik-Scientists and experts under DOST’s Balik-Scientist Program.
- Residents of Philippine Economic Zone Authority (PEZA) eco-zones whose travel is work-related and certified by PEZA.
The exemption attaches to the person, not the ticket; passengers who transfer carriers remain exempt.
4. TIEZA-PAL Interface
(How Philippine Airlines Implements Exemptions)
Collecting Agent Duty All airlines are deputised collecting agents (PD 1932; EO 283). PAL therefore embeds the tax—unless flagged as “TEC” or “PTR”—in every international ticket’s “XT” line and remits the same weekly to TIEZA along with a passenger manifest.
Real-Time Exemption Flags PAL’s reservations system interfaces with:
- POPS-BAM (for OFWs) – auto-writes an “FTE” indicator, suppressing the tax.
- TIEZA Travel Tax Services System (TTSS) – cross-checks TEC/PTR e-codes issued online.
- Corporate Exemption Lists – e.g., US Government charters or DFA block bookings.
Walk-in TEC/PTR Processing at PAL Ticket Offices
- Accepted in major PAL ticket offices (Manila, Cebu, Davao, Los Angeles).
- Passenger brings required proofs (see § 5). PAL inputs data, prints e-TEC, and zero-rates the tax line before payment.
- PAL may charge a ₱100-₱200 service fee (non-tax, airline revenue).
Post-Flight Refunds Where the tax was erroneously collected (e.g., OFW forgot OEC), PAL may file a bulk refund on behalf of passengers within 2 years (TIEZA IRR § 15). Passengers can also file individually, but the PAL-assisted route is faster because the airline already owns the original TIEZA remittance receipt.
5. Documentary Requirements & Workflow
| Step | Responsible | Core Documents |
|---|---|---|
| 1. Screening at PAL sale/check-in | Passenger Services Agent | Passport; proof of exemption (OEC, diplomatic note, PEZA ID, etc.) |
| 2. TEC/PTR Issuance | TIEZA window in PAL office or TTSS online | TIEZA Form 352 + photostat copies; no fee for TEC, ₱200 processing fee for PTR |
| 3. Tax Line Suppression | PAL ticketing | CRS entry “TAX-EXEMPT PER TEC # YYYY-NNNN” |
| 4. Audit and Remittance | PAL Finance Dept. | Weekly TRAVTAX-DCL report + bank transfer to TIEZA |
| 5. Post-Audit | TIEZA | Random sampling; discrepancies penalised under PD 1183 § 4 (₱5,000-₱50,000 + interest) |
All physical TECs bear a QR code since 2022; older paper TECs remain valid if within one-year validity.
6. Jurisprudence Touchpoints
While no Supreme Court ruling deals solely with PAL travel-tax exemptions, several cases illuminate the governing principles:
| Case | G.R. No. | Ratio relevant to Travel Tax |
|---|---|---|
| Philippine Airlines v. Eduardo Perez (CA) | CA-G.R. SP No. 119958, 12 Apr 2013 | Confirms TIEZA’s visitorial power over airline records and liability for under-collection. |
| PAL v. Davao Intl. Airport Authority | G.R. 193159, 20 Jan 2016 | Reiterates that travel tax is distinct from passenger service charge; collection mechanism may differ. |
| De la Cruz v. Commissioner of Customs | G.R. 211331, 16 Oct 2019 | Notes that travel tax is a “levy in the nature of a regulatory fee” earmarked for tourism development (40 %), education (40 %) and socioeconomic projects (20 %). |
7. Common Practical Questions
| Question | Short Answer |
|---|---|
| Can I pay the travel tax at the airport and seek a refund later? | Yes, but refund claims must be filed within 2 years and can take 2-6 months. |
| Does buying a ticket abroad spare me from the tax? | No. Liability attaches upon departure from a Philippine airport, regardless of ticket origin or currency. |
| Is the TIC (Terminal Fee) the same as Travel Tax? | No. Travel tax is under TIEZA/DOF; terminal fee is an airport charge under the aviation authority or private operator. |
| Do dual citizens using a foreign passport pay travel tax? | Yes, unless they can prove OFW status, diplomatic status, or another exemption under § 3. |
8. Compliance Tips for PAL Passengers
- Secure Exemption Early – Apply online at TTSS or at any PAL town office ≥ 48 hours before flight.
- Store Docs in Carry-on – Immigration may still ask for proof even if ticket shows “EXEMPT”.
- Check Your E-Ticket – The “TAX/FEE” breakdown should display “0 PHP” under the XT/PH line if exempt.
- Save Boarding Pass – Essential for refund petitions.
- Watch Out for Re-issuance – Any ticket re-issue (reroute/date change) re-triggers the travel-tax check, so reattach the TEC number.
9. Penalties for Airlines & Passengers
Airlines
- Under-remittance: surcharge of up to 25 % + legal interest (PD 1183 § 4).
- Repeated violation: suspension of ticketing privilege for outbound flights.
Passengers
- Presenting fake TEC/PTR: criminal liability under the Revised Penal Code (falsification), plus travel-tax payment with 50 % surcharge.
10. Forecast & Reform Notes (2025-2027)
- Digital TEC Wallet – TIEZA plans a smartphone-based “Travel Tax ID” by Q4 2025, which PAL will read via NFC at check-in.
- Rate Rationalisation – A DOF-DOT proposal (2024) seeks to peg the tax at 1 % of base fare instead of a flat peso amount; no legislation yet.
- Billeting to LGUs – Bills are pending to allow local government units hosting airports to partake in the 20 % socio-economic share; would not affect the exemption rules but may influence future rates.
Conclusion
The Travel Tax Exemption system, administered by TIEZA and operationalised through Philippine Airlines’ collection framework, is a carefully balanced mechanism: it generates tourism-fund financing while sparing clearly-defined sectors (OFWs, diplomats, humanitarian missions, etc.) from additional cost. For PAL passengers, the key is documentary readiness—secure your TEC or PTR before ticket issuance or check-in, verify that the tax line is suppressed, and keep proof for at least two years. PAL, as collecting agent, bears heavy penalties for mis-remittance, so its processes are rigorous; understanding them helps ensure a seamless (and tax-free) departure from the Philippines.