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Philippine Airlines
is to start collecting a 10% value-added tax on sales of domestic passenger tickets and cargo carriage, as well as on
domestic excess baggage charges, from 1 July 2005, in compliance with Republic Act 9337, the new law amending the internal revenue code.
The 10% VAT will be added to the total amount to be paid by the passenger or cargo shipper as stated in the air ticket or airway bill.
PAL's action follows the release today by the Bureau of Internal Revenue of the implementing rules and regulations governing the new law, which now includes
transport services within the Philippines by air and sea carriers.
PAL clarified that the addition of the 10% VAT does not constitute an increase in domestic fares and cargo rates but is a fiscal measure imposed by the government on
all airlines and shipping lines.
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