Hoteliers seek recall of BOI rule on income tax holidays

MANILA, Philippines - The Philippine Hotel Federation Inc. is calling on the Board of Investments (BOI) to revoke a regulation removing the income tax holiday (ITH) for tourism accommodation facilities in Metro Manila, Cebu City, Mactan Island and Boracay Island.

In an open letter to President Aquino published last Monday, the group headed by Arthur Lopez said it wants the BOI to revoke Regulation 2013-001 approved on March 5.

Under the new policy, expanding tourism accommodation projects such as hotels, resorts and bed and breakfast facilities in the four areas will no longer qualify for ITH.

Although the government is promoting the country as a viable investment haven, the group said offering both fiscal and non-fiscal incentives to provide the Philippines a competitive edge over its Association of Southeast Asian Nations’ neighbors is important.

The Department of Tourism (DOT) supported the federation’s call citing the anticipated room demand in line with the National Tourism Development Plan’s goal of achieving 10 million foreign tourists and 35.5 million domestic travelers by 2016.

The group also cited the expected demand from the country’s hosting of the Asia Pacific Economic Cooperation (APEC) forum in 2015 as well as the location of the primary gateways in Metro Manila and Cebu.

“Unfortunately, the Tourism Infrastructure and Enterprise Zone Authority (TIEZA), which is mandated by the Tourism Act of 2009 as the agency tasked to grant and administer incentives still awaits the issuance by the Bureau of Internal Revenue and the Department of Finance of the necessary revenue regulations that would allow it to implement the law,” it said.

The BOI regulation was issued following the Philippine Economic Zone Authority’s decision to amend rules on incentives given to tourism economic zone developers and locator enterprises in the four areas.