BOC Establishes Bonded Facility for Jet A-1 Fuel Imports, Offering Tax Incentives

The Bureau of Customs (BOC) has established a bonded facility for imported Jet A-1 fuel intended for international flights, creating a mechanism for eligible carriers and fuel suppliers to avail of tax incentives under the CREATE MORE Act. Under Customs Administrative Order No. 03-2026, the BOC established the Jet A-1 Fuel Facility (JAFF). This facility places imported Jet A-1 fuel under customs supervision before it is sold or used domestically. This ensures that the fuel is exclusively used for international aircraft, preventing diversion to the domestic market, while also deferring the collection of import duties and value-added tax (VAT). The initiative aims to enhance the competitiveness of the Philippines as an international aviation hub. Reduced fuel costs can directly impact airlines' operating expenses, potentially leading to stable or lower airfares. This is expected to have a ripple effect on the Philippine economy. The CREATE MORE Act (Corporate Recovery and Tax Incentives for Enterprises Act) expands tax incentives for corporations to support economic recovery from the pandemic. The establishment of this bonded facility applies the spirit of this law to the aviation fuel sector. The Philippine aviation industry has been growing in recent years, driven by increasing tourism and recovering business travel. Fuel costs are one of the major operating expenses for airlines, and this tax incentive measure is expected to contribute to the sector's sustained development.