PRESIDENT Rodrigo Duterte has signed into law a measure giving the Tourism Infrastructure and Enterprise Zone Authority (Tieza) another 10 years to grant fiscal incentives to tourism enterprise zones (TEZs).
Republic Act (RA) 11262, signed by Duterte on April 12, amends the provisions of RA 9593 or the Tourism Act of 2009 to give Tieza the "sole and exclusive jurisdiction" to grant incentives until December 31, 2029.
Tieza chief operating officer Pocholo Paragas said on Tuesday, May 28, 2019, that the 10-year extension is expected to generate some P222 billion in capital investments in the tourism sector.
Under RA 9593, Tieza had only until August 2019 to grant fiscal incentives to TEZs.
"The incentive schemes set forth in Sections 86, 87, and 88 of Republic Act 9593 shall be in effect until December 31, 2029, subject to review by the Joint Congressional Oversight Committee," the amended law reads.
"In the grant of incentives, it shall give equal preference to large investments, those with great potential for employment generation and those of local small and medium enterprises. Registered tourism enterprises owned and operated by overseas Filipino investors shall enjoy the same incentives granted to TEZ operators and registered enterprises in general," it added.
The fiscal incentives that will be granted to TEZ developers, as per the original law, include six-year income tax holiday that may be extended for another six years; a five-percent preferential tax on gross income in lieu of national taxes except for real property tax and fees of Tieza; and a net operating loss carry-over scheme.
Other incentives are import tax exemptions for capital goods and equipment needed for Tieza-registered activities; import tax exemptions for transport equipment and spare parts needed for Tieza-registered activities; and exemption from value-added tax and excise-tax goods imported for Tieza-registered activities.
They will also be granted tax credit equivalent to national taxes paid on local goods and services procured by registered tourism enterprises (RTEs) for activities in TEZs, and tax deduction of up to 50 percent of cost of environmental protection and cultural heritage preservation activities, as well as of sustainable livelihood programs of RTEs.
To prevent abuse of the incentives, the Tieza is instructed to further coordinate with the Bureaus of Customs and Internal Revenue in preparing and enforcing the amended law's rules and regulations
"The investment incentives offered under this Act shall be without prejudice to availing other incentives provided under other laws, decrees, and presidential issuances," RA 11262 said.
"However, where such other laws, decrees or presidential issuances provide for similar or identical incentive schemes, the investor may only elect to avail of he scheme provided under one particular law, decree or presidential issuance," it added. (SunStar Philippines)