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Duterte extends mandate of tourism regulator to grant fiscal incentives

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PRESIDENT Rodrigo R. Duterte has extended the authority of the Tourism Infrastructure and Enterprise Zone Authority (TIEZA) to grant incentives to tourism enterprises until Dec. 31, 2029.

Mr. Duterte signed Republic Act No. 11262 on April 10. Malacañang e-mailed to reporters copies of the law on Monday.

The new law amends Republic Act No. 9593, or the Tourism Act of 2009, which gives TIEZA “sole and exclusive jurisdiction”to grant incentives to tourism businesses, to extend implementation of the incentive scheme for tourism enterprises zones for another 10 years.

Under the old law, TIEZA had only until August 2019 to grant incentives.

Incentives that TIEZA grants tourism enterprises include income six-year tax holidays, a five percent preferential tax on gross income, exemption on all taxes and duties on imported capital equipment, as well as exemption of transport equipment and spare parts from tariffs and duties.

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TIEZA is also authorized to give “equal preference to large investments” that have “great potential for employment generation and those of local small and medium enterprises.”

The Finance department is now pushing for reform that will cut the corporate income tax rate gradually to 20% by 2029 from 30% currently, in tandem with scrapping of tax holidays and other fiscal incentives deemed redundant that have been depriving the government an estimated P100-300 billion in foregone revenues a year.

Asked how this planned reform will affect incentives given to qualified tourism investors, Finance Assistant Secretary Antonio Joselito G. Lambino II said in a mobile phone message: “We are advocating an incentive regime that is performance-based, time-bound, transparent and targeted.”

“This means all laws that grant incentives should be consistent with these principles…,” he said, adding that the department will “need to carefully review the version [of the fiscal incentives reform] that is filed in the upcoming 18th Congress” that opens its first regular session on July 22.

RA 11262 also removes RA 9593’s provision that limits the existence of the Joint Congressional Oversight Committee to 10 years from May 12, 2009.

The new law also reads: “The Secretary (of Tourism) shall report to the oversight committee on a monthly basis the latest statistics on tourist arrivals and other relevant data.”

“He or she shall also report, on a quarterly basis, the status of implementation of this Act based on the monthly report submitted thereto by all attached agencies of the department with respect to the implementation of their respective programs.”

The Department of Tourism announced in a May 9 press release that 2,204,564 foreign tourists visited the country last quarter, 7.59% more than the 2,049,094 who arrived in last year’s first three months. — Arjay L. Balinbin

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