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Lucio Tan flight attendants and stewards of Philippine Airlines (PAL) Jul 2, 2018 @ 9:58

PAL worst taxpayer among airlines: Lucio Tan owes gov’t P78M in travel taxes


Bilyonaryo Lucio Tan’s tax issues are not limited to the Bureau of Internal Revenue.

The Commission on Audit reported that Tan’s Philippine Airlines (PAL) owed the Tourism Infrastructure and Enterprise Zone Authority (TIEZA) close to P78 million in unpaid travel tax assessments.

In TIEZA’s 2017 annual audit report, COA said PAL was the worst tax payer among the airlines as it accounted for 85 percent of the P92.154 million travel tax assessments that have not been paid for more than a year. The tax assessments were derived from the airlines’ and tarvel agencies erroneous footings and unremitted collections, violations, and surcharges and penalties.

“These accounts have been referred to the Authority?s Legal Department for necessary legal action,” said COA.

All carriers are required to remit their travel tax collections to TIEZA on the 15th and 30th day of the succeeding month. COA said even this policy was “disadvantageous” to TIEZA because “the long holding period of collections deprives the Authority of immediate use of the funds for its operation and tourism related projects.”

Aside from PAL’s non-payment of travel tax, COA raised concerns on TIEZA’s inability to assess whether the airlines were paying the right taxes and fees due to inaccessible records. ”

“With the advent of web/online ticketing, carriers have incorporated the payment of travel taxes for traveling passengers purchasing their tickets online regardless of the place of booking. Under the said procedure, passengers outside the country who are purchasing web/online tickets may now pay the travel tax simultaneously with the payment of the ticket itself,” COA said.

“As such, the accuracy and completeness of travel tax collections remitted by carriers on tickets purchased abroad through online ticketing cannot be verified since records are not submitted by such carriers.Hence, affecting the reliability of Travel Tax Revenue presented in the financial statements of the Authority,” it added

COA also noted that weak internal control measures imposed by TIEZA to ensure that airlines paid the right taxes.

“Audit disclosed that the validation of the proof of payment of travel tax is done only by the carriers? attendants upon the counter check-in of the departing passengers. The Authority does not have a procedure to countercheck proof of payment made by passengers who purchased tickets online. The assurance that all passengers have paid the travel tax before departure cannot be established, thus, resulting in possible loss of revenue from travel tax collections,” COA said.

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