By Hanah Tabios
The Board of Investments (BOI) will grant tax incentives to tourism-related industries that are upgrading and modernizing their facilities in view of the new normal setting brought by the COVID-19 pandemic.
This was in response to the Department of Tourism’s (DOT) request to ensure the health, safety, and wellness of all tourism stakeholders and its clients as they gear up for the recovery of the industry.
“We recognize that the tourism sector has been one of the worst affected of all the major sectors of the economy due to the current health crisis. By way of providing investment incentives, we hope the sector, which was a major driver of the economy’s growth pre-COVID-19, will stay afloat, continue their business operations, and recover the soonest they can,” Trade Secretary and BOI Chairman Ramon Lopez said in a statement.
On Wednesday’s Kapihan sa Manila Bay, Secretary Bernadette Romulo-Puyat also revealed to the panel that among the tax incentives approved by the BOI is the income tax holiday for a period of three years and duty-free importation of capital equipment in which tourism enterprises will only pay the value added tax (VAT) for tourism projects that will renovate to enhance health and safety features and processes. The income tax holiday will also be pro-rated according to the amount of upgrade or renovation.
Renovations or upgrades that can qualify for such tax incentives include: renovation of guestrooms, food and beverage outlets, function/meeting rooms, recreation areas and/or other common areas; investment in new or upgrade of laundry, kitchen, housekeeping, employee facilities and other back of house facilities; building of full, partial or movable partitions; installation of built-in thermal scanners, hygiene gates, and/or booths; upgrade or improvement of ventilation, air conditioning, air filtration systems, water systems, water treatment facilities (STP); a mobile check-in system; non-touch or no contact door lock systems and non-touch control panels in elevators and other areas.
Tourism enterprises that are eligible to apply for investment incentives include hotels and resorts, meetings, international conventions, and events (MICE) facilities and tourist transport companies nationwide, including those in Boracay.
Boracay’s upgrade, according to BOI, will greatly help the tourism industry recover faster as it is considered as one of the country’s tourist hotspots attracting mostly foreign tourists.
For tourist transport, those that will qualify should be locally-assembled vehicles with sanitation features as part of the measures to combat COVID-19.
With this development, Philippine Hotel Owners Association (PHOA) president Arthur Lopez, who was among the panel at the same forum, said the tax incentive is a big help for the upgrade of hotel industries.
The DOT also encouraged tourism-accredited establishments to invest in contactless technologies like the ones developed by Talino Ventures Labs’ SafePass Express and Dine In Express.
Lopez said prior to BOI’s approval, PHOA sent a four-page letter to DOT to help them fund the renovation of hotels.
“The hotels right now are gearing up for reopening hopefully by June. As far as the status of the hotel’s finance, of course, we are not making revenues at the moment, but thank you to the Secretary for the support,” he said.
Tourism Congress of the Philippines (TCP) president Jose Clemente III also echoed Lopez’s statement that the tax incentives for renovations and upgrades will go a long way to address safety protocols imposed by the DOT and IATF.