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Investment Incentives with the Tourism Infrastructure and Enterprise Zone Authority

Under the Philippine Tourism Act, the Tourism Infrastructure and Enterprise Zone Authority (TIEZA) becomes the lead agency for facilitating and supervising investments in the tourism sector (RA 9593, sec. 64). It benefits from the experience of other investment agencies, such as the Philippine Economic Zone Authority (PEZA) and the Subic Bay Metropolitan Authority (SBMA), while developing specialized expertise in the peculiarities of tourism, particularly on its economic, environmental and socio-cultural dimensions. Much stress is placed on the need for thorough planning, but significant tax and administrative incentives are offered to encourage responsible tourism development. An enterprise in a tourism enterprise zone shall be entitled to the following:

1) Administrative Incentives. TIEZA offers one-stop shop administration of incentives, and it has worked closely with other government agencies to ensure the speedy and responsible approval of applications (sec. 77). Moreover, TIEZA is vested with sufficient powers to properly supervise operations of tourism enterprise zones and tourism enterprises, and to enforce relevant laws, rules and regulations (sec. 69, 70, 78), while encouraging harmonious relationships between all stakeholders in a tourism enterprise zone, ranging from investors to employees, and culture to environment organizations, among others (sec. 81, 83, 84).

2) Fiscal Incentives. TIEZA further offers a package of fiscal incentives superior to those of other Philippine investment agencies, if not those in the region (sec. 86):

A 6-year income tax holiday, extendible for up to an additional 6 years, under certain conditions

Upon expiration of the income tax holiday, an enterprise will receive the preferential tax rate of 5% on gross income

The importation of capital equipment shall be tax and duty-free

Under certain conditions, the tax free importation of goods, or tax credits for local sourced goods, that are consumed in the course of providing services within TEZs

A social responsibility incentive for environment, culture, or community livelihood projects, as a tax credit of up to 50% of the cost of such projects

3) Foreign investment incentives. TIEZA also offers incentives to foreign investors similar to that of other Philippine investment agencies, such as the long-term leases of land, employment of foreign nationals, issuance of special investors visas, foreign currency transactions, among others (sec. 87).

TIEZA thus offers a package superior to that of other investment agencies, particularly because of its longer income tax holiday, the possibility of tax reductions from consumable goods, and the provision for a social responsibility incentive that in essence promotes sustainable and responsible tourism.


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