HOUSE AWAITS ENACTMENT INTO LAW OF BILL EXTENDING PERIOD OF GRANTING TOURISM INCENTIVES
The House of Representatives is now awaiting the enactment into law of House Bill 8861 which seeks to extend the period for the grant of incentives to Tourism Enterprise Zones (TEZs) and registered tourism enterprises.
If the bill is enacted into law, the incentive schemes set forth in Republic Act 9593 or the “Tourism Act of 2009” shall be effective until December 31, 2026, subject to review by a Joint Congressional Committee. The incentive schemes are presently effective up to 2019 only per RA 9593.
The House transmitted the bill to the Office of the President last March 11, 2019.
To extend the period of granting incentives to TEZs and registered tourism enterprises, House Bill 8861, principally authored by Reps. Alfred Vargas (5th District, Quezon City) and Luis Raymund Villafuerte Jr. (2nd District, Camarines Sur), seeks to amend RA 9593.
In particular, the bill seeks to amend Chapter V, Section 85 and Chapter VIII, Section 103 of RA 9593. Chapter V is titled “General Principles on the Grant and Administration of Incentives” while Chapter VII is titled “Creating a Culture of Tourism.”
The amendment to Chapter V, Section 85 (a) of RA 9593 provides that in the grant of incentives, the Tourism Infrastructure and Enterprise Zone Authority (TIEZA) 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.
Moreover, the amendment provides that the amount of required investments shall be defined in the implementing rules and regulations of RA 9593. The incentive schemes set forth in Sections 86, 87, and 88 of RA 9593 shall be effective up to December 31, 2026, subject to review by the Joint Congressional Committee.
At present, the incentive schemes provided in RA 9593 are in effect for a period of 10 years from the effectivity of the Act, which is 2019. RA 9593 was enacted on May 13, 2009.
Meanwhile, the amendment to Chapter VIII, Section 103 of RA 9593 titled “Joint Congressional Committee” provides that a Joint Congressional Committee, referred to as “Oversight Committee”, is hereby constituted in accordance with the provisions of the Act.
The Oversight Committee shall be composed of the Chairpersons of the Committee on Tourism of both Houses of Congress, the Chairpersons of the Committee on Ways and Means of both Houses of Congress, the Chairperson of the Committee on Appropriations of the House of Representatives, the Chairperson of the Committee on Finance of the Senate, and three additional members from each House to be designated by the Senate President and the House Speaker.
In his explanatory note of his bill, Vargas said at present, among the incentives being granted by the TIEZA to tourism enterprises within a TEZ 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, and the exemption of transportation and spare parts from tariffs and duties.
However, Vargas noted that nine years since the enactment of RA 9593, the TIEZA has been unable to grant the incentives mandated by the law because the necessary revenue regulations for these incentives were only approved and released 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. The bill seeks to rectify this by extending the effectivity of the incentives schemes provided for another seven years,” said Vargas