Tourism stakeholders seek deferment of business taxes

TOURISM stakeholders are appealing for a deferment of their business taxes as they seek to renew their business permits from local government units (LGUs) for 2021.

In a letter to Interior Secretary Eduardo M. Año dated January 18, 2021, Jose C. Clemente III, president of the Tourism Congress of the Philippines (TCP), said in the process of renewing their business permits, tourism stakeholders have received “assessment fees for business taxes” from their respective LGUs. Clemente said most of these stakeholders are unable to pay said business taxes due to the current state of the tourism industry.

“Most only earned income during the first quarter of 2020 with nothing else after that. Some LGUs are also basing their assessment fees on 2019 income, which does not take into consideration the business conditions of 2020,” he added. Among the LGUs using the 2019 income as basis for this year’s assessment is the Manila City government, he said separately in a text message to the BusinessMirror.

TCP is requesting the Department of the Interior and Local Government (DILG) to “defer the payments of business taxes for 2021 in light of the pandemic and its adverse effects on the tourism industry,” as stakeholders don’t have the funds to pay for the assessments.

Many LGUs, however, have indicated their inability to implement projects this year, precisely because of poor tax collections from businesses. The DILG has yet to act on the request of TCP as Año continues to be indisposed, according to government sources.

The request of the TCP was endorsed by Tourism Secretary Bernadette Romulo Puyat to Año in a separate letter dated January 19, 2021. She noted, “It may be recalled that in one of the IATF [Inter-Agency Task Force for the Management of Emerging Infectious Diseases] meetings, it was discussed that the DILG would encourage LGUs to defer payment of local business taxes, in consideration of the dire financial straits of certain businesses.”

The TCP is the umbrella organization of tourism stakeholders in the country authorized under Republic Act 9593 (Tourism Act of 2009).

Business permits renewal

Separately, the 612-member Philippine Travel Agencies Association (PTAA) requested Romulo Puyat for help in seeking an extension for the renewal of business permits.  The deadline for renewal is January 20 of every year.

In its letter dated January 16, 2021, to the DOT chief, newly elected PTAA president Michelle Taylan said, “As they move forward to slowly restart their operations this year and be the frontliners as the country opens up its tourism industry further, government filings including business permits become an additional burden to them especially after they produced close to zero revenues last year because of the lockdown.”

International travel restrictions to control the spread of Covid-19 and its new variants continue to hammer the local tourism industry, which relies much of its revenues on foreign guest arrivals. This has led to a number of enterprises closing shop or half-operating, with their employees still working from home. Hotels in Metro Manila have a lifeline as they are allowed to accept quarantine guests and reopen their dining outlets.

This was not enough, however, to keep the iconic Makati Shangri-La Manila  to remain open. It was closed on February 1, 2021, “Owing to continued low business levels.”

(See, “Another Covid victim: Makati Shang closes doors in February,” in the BusinessMirror, January 20, 2021.)

Another hotel, the 125-room Legend Villas in Mandaluyong City, announced its closure on its Facebook page on Monday. “For 28 years, you have chosen us to be part of your vacations and meetings. For 28 years, we have served you the most delicious home-style Filipino dishes in the metro. For 28 years, we have become witness to countless milestones and life celebrations. For 28 years, our guest rooms have been your home away from home. All of those, we will forever keep,” the hotel’s management wrote on its social-media accounts.

The hotel is owned by Wyden King, son of the late Anito Lodge founder Angelo King. It served as a quarantine establishment for returning Filipinos until December 2020. Legend also closed its property in Puerto Princesa in November last year.

Citing poor tourism prospects, Marco Polo Davao also closed in June 2020.

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