Tax issues put a damper on spas’ rosy prospects

CEBU, Philippines – Prospects for the wellness sector is expected to get even rosier this year as wellness services, including spa, massage, among others have become part of an ordinary person's daily or weekly regimen.

Johnie Lim, past president of Spa and Wellness Association of Cebu, said this positive outlook should encourage Cebu City to provide a friendly environment for the spa business such as excluding operators from paying amelioration tax that has discouraged spa operators to expand within Cebu City, despite the big market potential.

Lim, who is also the owner of Body & Sole Franchise Corporation, one of the largest spa chains in the country, said that the potential for growth could have been easily achieved, if this long overdue appeal had been given resolution by the Cebu City government.

Three years ago, the Department of Trade and Industry Cebu Provincial Office, called the attention of the Cebu City government to abolish the amelioration tax imposed on spa operators and wellness related businesses.

An ordinance was requested to amend the existing Cebu City ordinance which requires spa operators to pay amelioration tax which could get as high as P300 thousand a year. The spa industry has been categorized as “entertainment.”

Lim said spa services now like massage, facial, and other wellness services have become part of a person's routine "it’s nothing special anymore."

Lim said this and the influx of tourists also made the wellness sector alive, despite the difficult business environment in Cebu City.

Body & Sole for instance will add at least four to five outlets this year nationwide. In Cebu, expansion is planned in the cities of Talisay or Mandaue.

According to studies, beauty and wellness has become one of the fast growing sectors in the world.

Investing into these services that enhance well-being is not anymore regarded as "mere vanity" but has become an important part of one's ritual.

A growing middle class and consumers' evolving preference toward health and travel have fueled a global spa and wellness industry worth an estimated US $3.4trillion in 2013, according to a report.

Nutrition and weight loss, preventative and personalized health, complementary and alternative medicine, and beauty and anti-aging treatments were the biggest growing sectors, the report compiled by the non-profit research center SRI International showed.

Spa treatments and products, alternative and complementary treatments and weight-loss programs were once considered beyond the means of many people.

To compile the report, researchers looked at wellness sectors ranging from mind and body fitness to beauty and anti-aging, spas and workplace wellness.