House OKs grant of incentives for tourism enterprises for seven more years

Published January 22, 2019, 1:11 PM

by Francine Ciasico

By Charissa Luci-Atienza

The House Committee on Ways and Means has passed a bill seeking to extend the granting of fiscal incentives for tourism enterprises for seven more years beginning 2020.


Nueva Ecija Rep. Estrellita Suansing, panel chairperson, said after looking into the measure and striking a balance between revenue generation and tourism promotion, they approved the unnumbered substitute bill to House Bills 7333 and 7535, which seeks to amend the provisions of Republic Act 9593 or the “Tourism Act of 2009.”

“We have extended the granting of incentives for tourism enterprises for seven more years,” she said in an interview.

She said RA 9593 granted a period of 10 years for pertinent entities to avail of fiscal incentives for purposes of promoting tourism.

“However, the issuance of the implementing rules and regulations was delayed for seven years resulting in the shortened actual period of availment of the said incentives. Since the period to avail of the incentives is ending this year, it is proposed to extend the availment period by seven more years so that the intent of the law shall be realized, ” Suansing said.

RA 9593 authorized the Tourism Infrastructure and Enterprise Zone Authority (TIEZA) to grant incentives to tourism enterprises within Tourism Enterprise Zones (TEZs) for a period of 10 years, which shall spur investments in sustainable tourism developments.

The current 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.

During a recent hearing, TIEZA Officer-in-Charge Atty. Joy Bulauitan told the panel that TIEZA only granted the mandated incentives in 2016.

While the implementing rules and regulations (IRR) were already crafted soon after the enactment of RA 9593, the necessary revenue regulations were only issued by the Bureau of Internal Revenue (BIR) in 2016, Suansing noted.

Quezon City Rep. Alfred Vargas, principal author of the bill, said the revenue regulations were only approved and implemented on November 15, 2016. “As a result, the country fell short in achieving its targets set forth by the National Tourism Development Plan 2011-2016,” he said.

Davao Oriental Rep. Corazon Nuñez-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.

“During the seven years of non-implementation of these incentives, our country missed out on billions of dollars in investment opportunities [and] employment opportunities…,” she said.

“Moreover, the early implementation of these incentives and steady influx of foreign investments into the country could have greatly contributed to the attainment of a stable, sustainable, and competitive economic image for the Philippines in the international market,” Malanyaon added.

Surigao del Sur Rep. Johnny Ty Pimentel, meanwhile, said Congress would run after those behind the non-implementation of the provisions of RA 9593, particularly the incentive schemes.

“Ang batas hindi natin na-iimplement kapag walang IRR. That is why the agency [should exercise] due diligence to issue the IRR. Kasi useless, pasa tayo nang pasa ng batas, eh wala namang IRR. How can we implement it? We just want to know the reason why the IRR was not issued,” he said.

During the hearing on Monday, Finance Director Juvy Danofrata disclosed that the economic loss projected by the Department of Finance from 2011-2016 due to the BIR impasse amounts to P531 billion after Bukidnon Rep. Manuel Zubiri asked about the opportunity loss.

In seeking the final passage of the bill, Vargas said the tourism industry is an important part of the country’s development plans.

“The industry is vital in economic development as it has contributed 7.8 percent to the country’s gross domestic product. Thus, not only does tourism help spread our heritage, it also supports grassroots economy, advances work creation, and increases consumption of local products and services,” he said.

RA 9593 aims to develop a tourism action plan in an effort to establish the industry as one of the principal instruments of growth in the Philippines.