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Monday, August 26, 2019

Cabaero: Trickle-down

WITH big money coming in from whale shark watching activities in Oslob town, Cebu, there must be trickle-down benefit to the majority.

That’s exactly what two government agencies are acting on following their discovery of the huge amount of money that comes in from tourists for that attraction alone.

The Commission on Audit (COA) is demanding accountability and the Bureau of Internal Revenue (BIR) is insisting on tax payment from those running the Oslob tourist attraction.

The COA has asked Oslob town officials to deposit promptly earnings from its whale shark watching activities, placed at P1.2 million a day last year. The BIR, on the other hand, is demanding more than P50 million worth of income, value-added and withholding taxes for 2012 and 2013 from the Oslob Municipal Government for the same whale shark watching activity.

Cebu is a leading tourist destination in the country, made more popular to local and international visitors as an alternative to Boracay that was closed for six month starting last April. A study on how tourism earnings are spent and shared among stakeholders is a look into how the benefits have trickled down to the majority.

In its 2017 audit report, the COA said Oslob officials took a long time, sometimes 18 days and when collection has reached some P20 million, before the money is deposited in an authorized government depository bank. The delay could lead to losses due to fire, theft or misuse, the audit report said.

Oslob officials responded by explaining that the money is shared among the municipal government at 30 percent, and the local fishing association and the barangay, 70 percent. It was a way of letting others, not only government, benefit from the tourism activity. Although this showed the trickle-down effect to the people directly affected, their response did not address the delays in depositing the funds and, thus, the inability of others to benefit.

The whale shark watching activity earned an average of P1.2 million a day last year, based on at least 1,000 visits and fees pegged at P500 for a local tourist and P1,000 for every international visitor.

In Cebu, it is not even about Oslob alone. The COA asked Alegria town officials to explain why it gave a farmers’ association a share of proceeds from the canyoneering operations in Kanlaob River when this was not supported by an ordinance. There was no basis, no municipal ordinance, to support the giving of a share to the Compostela Farmers’ Association, the COA said.

There are financial benefits to those who work directly in the operation of tourism activities but those gains are meant to be spread.

The common understanding of trickle-down effect is that those directly affected by a project or venture benefit from the undertaking. The COA and BIR actions on tourism earnings in Oslob and Alegria are meant to determine how tourism benefits can reach the majority who are not directly affected.


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