Eradication of the Practice of Using Airline Tickets Issued Abroad by Passengers Originating in the Philippines

September 11, 1985

LETTER OF INSTRUCTIONS NO. 1479

 

WHEREAS, the widespread use of airline tickets issued abroad by passengers originating in the Philippines has resulted in the evasion of the payment of travel taxes, thereby depriving the country of much needed tax revenues arising from income, percentage, common carrier's brokers, and local taxes;

WHEREAS, this practice has also reduced the yield for the airlines and adversely affected the economic viability of local travel agents;

WHEREAS, the payment in foreign currency for these tickets issued outside the Philippines by passengers originating in the Philippines tends to encourage black marketing in foreign exchange and provides a vehicle wherewith to circumvent existing Central Bank rules and regulations; and

WHEREAS, it has become necessary to eradicate this practice in the interest of the national economic recovery and development program;

NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, do hereby order and instruct that: acd

1. Airline tickets issued outside the Philippines for international air transportation of passengers originating in the Philippines shall not be valid for such transportation. Any passenger, airline or travel agent found to be issuing or in any way assisting in the issuance of such tickets shall be liable as provided in paragraphs 2 and 3 hereof, without prejudice to their criminal prosecution for tax evasion as warranted.

For this purpose, a passenger travelling abroad from the Philippines shall be deemed originating in the Philippines if;

a) He is a resident of the Philippines; or

b) His travel abroad from the Philippines is subject to the payment of the travel tax imposed under PD 1183, as amended;

c) The first leg of his actual trip starts in the Philippines as verified by the absence of the corresponding immigration entry on his passport subsequent to the date of issuance of the airline ticket abroad.

An airline ticket is deemed issued outside the Philippines if it shows on its face that it has been issued outside the Philippines.

2. Accordingly, the Civil Aeronautics Board is hereby directed to issue an order to all airlines operating to, from or through the Philippines including off-line carriers with sales offices and/or general sales agents in the Philippines; and the Bureau of Tourism Services is likewise hereby directed to issue an order to all travel agencies, prohibiting the importation into the Philippines for use in international air transportation by passengers originating in the Philippines. cd

The said Orders shall specifically provide that violation of such prohibition will constitute sufficient cause for the imposition of the proper penalty in accordance with law, including the suspension or cancellation of the permits issued, against such airlines and travel agencies.

3. The Civil Aeronautics Board is further hereby instructed to issue an order directing all airlines operating to, from and/or through the Philippines to ascertain whether or not tickets for international air transportation of passengers originating in the Philippines, presented by such passengers at the airline check-in counters at the Manila International Airport have been issued outside the Philippines. If so, the said CAB Order shall require all airlines not to honor such tickets and shall provide that violation of such prohibition will result in the imposition of the proper penalty in accordance with law, including the suspension or cancellation of the erring airlines permit.

4. All agencies of the government concerned should cooperate in designing procedures, systems and programs by which the importation into the Philippines and use of airline tickets issued outside the Philippines for international air transportation of passengers originating in the Philippines can be effectively prevented.

5. This Letter of Instruction shall take effect fifteen (15) days after its publication in a newspaper of general circulation.

DONE in the City of Manila, this 11th day of September, 1985.