MANILA, Philippines — The Tourism Infrastructure and Enterprise Zone Authority (TIEZA) has lauded Congress’ adoption of the Bicameral Conference Committee Report seeking to extend the grant of fiscal incentives for tourism enterprise zones (TEZs) until Dec. 31, 2029 or an additional 10 years.
RA 9593 or the Tourism Act of 2009 stipulates that the incentive schemes for the tourism enterprises shall be in effect for a period of 10 years from the effectivity of the said law.
The law specifies that these incentives include income tax holidays, gross income taxation of five percent, 100 percent exemption on all taxes and customs duties on the importation of capital equipment, as well as the exemption of transportation and spare parts from tariffs and duties.
The sponsors of the bill – Sen. Richard Gordon and Davao Oriental Rep. Corazon Nuñez-Malanyaon asserted the need to extend the sunset clause in order to give life to the intent of the law that the incentive scheme should be implemented for 10 years.
TIEZA chief operating officer Pocholo Paragas noted that the extension of the fiscal incentives until 2029 will help encourage more tourism-related investments into the country which are expected to create more jobs and stimulate growth in the tourist destinations.
“The approved measure of the bicameral conference committee sought to end the confusion and apprehension among prospective investors in flagship TEZs and private tourism enterprise zones,” he added.
The Tourism Act of 2009 provided full government assistance by way of competitive investment incentives, long-term development fund and other financing schemes extended to tourism related investments. However, it took seven years before the Bureau of Internal Revenue (BIR) to issue the regulations to enable TIEZA to grant the incentive schemes.
Rep. Malanyaon, chairperson of the House committee on tourism, said the extension seeks to rectify the time lost for the TIEZA to implement these incentive schemes. On the other hand, Sen. Gordon in his sponsorship speech, cited that this measure will be a major contributor toward the country’s socio-economic growth which will help the economy and alleviate poverty through creation of more jobs and business opportunities.
Gordon also noted that the amendment to the Tourism Act was part of the recommendations of Committee Report 169, filed on Nov. 29, 2017, as a product of the investigation due to the BIR’s non-issuance of the required revenue regulations which led to the continuous delay in the implementation of the Tourism Act.
As of Dec. 31, 2018, TIEZA has already designated five flagship TEZs which is projected to generate one million jobs in a span of 10 years while 10 private TEZs with tourism enterprises will create 52,000 jobs during the construction and operation stage. The projected investments for the flagship TEZs and private TEZs are estimated to reach P106 billion.
TIEZA has also awarded the certificates of registration to the Magikland inside the Aton Land and Leisure TEZ, Kingdom Stadium inside Kingdom Global City TEZ in Davao, Lazuli Resort and Kabote Beach Resort in San Vicente and the Signature Suites in Boracay.