INCENTIVES enjoyed by companies within the Tourism Infrastructure and Enterprise Zone Authority (Tieza) will end in 2018, just two years after the implementing rules of Republic Act (RA) 9593—or the Tourism Act of 2009— took effect, the Department of Finance (DOF) said on Tuesday.
Finance Secretary Carlos G. Dominguez III explained at the general membership meeting of the Philippine Hotel Owners Association Inc. on Tuesday that, under the law, the incentives granted to companies within Tieza will end by year-end.
“That law was passed in 2008 but never implemented by the last administration. [When we came into office] one of the first things I did was implement it and we will have it run its course. So it should be ending this year. That’s the current law, it’s going to end this year,” Dominguez said.
Under RA 9593, new enterprises in tourism zones are exempt from tax on income for a period of six years from the start of operations, along with other incentives.
“New enterprises in Greenfield and Brownfield Tourism Zones shall, from the start of business operations, be exempt from tax on income for a period of six years.
“This income tax holiday may be extended if the enterprise undertakes a substantial expansion or upgrade of its facilities prior to the expiration of the first six years,” the law said.
The law also allows for a congressional review of the measure every three years after its approval.
“This act shall be subject to congressional review by Congress three years after its approval and every three years thereafter,” the law added.
Under the law’s implementing rules and regulations (IRR), a sunset provision is stipulated in line with the effective administration of tax incentives for tourism enterprise zones for a period of 10 years or until 2019.
RA 9593 was created in 2008 but its IRR was released only in November 2016.
“We are not the ones who made that law, it’s the legislature, and as far as I know there’s no act or any interest of the legislature to continue that law. The law is the law, it’s not my fault that it was not implemented,” Dominguez added.