Board of Investments grants tax perks to local firm's hotel project

MANILA, Philippines - The Board of Investments (BOI) has granted fiscal incentives to the P283- million hotel project of Filipino firm Coral Way City Hotel Corp. at the Mall of Asia (MOA).

In a memorandum released by the BOI, it stated that Coral Way was given incentives for the construction of the 150 room Microtel Inns and Suites Mall of Asia. The project started this month and will hire 67 employees.

The Department of Tourism (DOT) has endorsed the project as an economy class hotel on a non-pioneer status. The DOT defines an economy class hotel as a type of hotel classification that does not meet the minimum requirements of a standard class hotel. It contains basic room features.

The firm will develop 2,713 square meters of leased land and the construction of a 12-story hotel named “Microtel Inns and Suites Mall of Asia.”

The target clients for the hotel shall be local and foreign tourists, businessmen and travelers visiting Metro Manila. It will be located at Coral Way Avenue cor. Seaside Blvd Mall of Asia Complex Pasay City. The 2,713 sqm land will be leased by the company from Shoemart Inc for a period of 20 years renewable for another 10 years.

Likewise, the company has a pending request with the Securities and Exchange Commission (SEC) for an increase in capitalization. The enterprise shall increase its equity to at least P70.75 million or equivalent to 25 percent of the total project cost. The firm will have to submit proof of compliance before it can avail of the income tax holidays (ITH).

Meanwhile, the Department of Finance (DOF) did not endorse the granting of the ITH. DOF noted that the tax incentives is highly redundant because the project is domestic oriented and is located in a highly developed area. However, since the project is tourism related, it is endorsed for registration with partial grant of tax incentives limited only to duty exemption on imported capital equipment.