Tourism and tourism-related industries that are upgrading and modernizing their facilities aimed at ensuring the health, safety, and wellness of their clients, may get a reprieve through investment incentives.
The incentives are a result of discussions between the Department of Tourism (DOT), on behalf of the tourism stakeholders, and the Bureau of Investments (BOI), with the latter quickly crafting and approving the policy to help the tourism sector recover from the effects of the COVID-19 pandemic.
The tax incentives to be granted by BOI are income tax holiday for a period of three years and duty-free importation of capital equipment (only VAT will be paid) for tourism projects that will renovate to enhance health and safety features and processes. The income tax holiday to be given will be pro-rated according to the amount of upgrade/renovation.
“We recognize that the tourism sector has been one of the worst affected of all the major sectors of the economy due to the current health crisis. By way of providing investment incentives, we hope the sector, which was a major driver of the economy’s growth pre-Covid-19, will stay afloat, continue their business operations, and recover the soonest they can,” said trade secretary and BOI Chairman Ramon Lopez.
Tourist accommodation facilities, which would like to undertake improvements to ensure their facilities remain COVID-free, may register these with the BOI as modernization projects subject to qualification requirements.
Tourism enterprises that are eligible to apply for investment incentives include hotels and resorts, meetings, international conventions, and events (MICE) facilities, and tourist transport companies nationwide, including those in Boracay.
For tourist transport, these should be locally-assembled vehicles with sanitation features. The motor vehicles to be acquired or to be upgraded/modernized will have such sanitation and hygiene features including but not limited to barriers, payment portals, deionizers, seat organizers for sanitation kits, and other features that would promote physical distancing.
Examples of renovations/upgrade that can qualify for such tax incentives include renovation of guestrooms, food and beverage outlets, function/meeting rooms, recreation areas and/or other common areas; investment in new or upgrade of laundry, kitchen, housekeeping, employee facilities and other back of house facilities, among others.