Big players buck removal of hotel tax perks

MANILA, Philippines - Big industry players are against the government’s proposal to remove the income tax holiday (ITH) being enjoyed by hoteliers in Metro Manila and Central Visayas, and nearby provinces, saying that this is a violation of the Tourism Act.

Rajah Tours Philippines president Alejandra Clemente, who had been privy to the crafting of Republic 9593 or Tourism Act of 2009 since day one, said the scrapping of the tax perks is a blatant disregard of the existing law.

“If they want to change the rules, they have to amend the bill,” she said, adding that the removal of the ITH is sending a wrong signal to existing and future international and local investors.

Because of this Clemente said it is likely that the Philippines will not be able to meet its 10 million tourist arrival target for 2016.

“While the DOT is spending a lot of money encouraging investors and tourists to come in, here comes one agency trying to lure them away. Let’s talk about consistency and coordination here. How can you expect investors to pour in money here with all these uncertainties,” she said.

Clemente raised doubts on the potential revenue losses being allegedly incurred by the government in giving out the ITH.

“They are presenting figures (revenue loss) and savings from the removal of ITH. I doubt it. Show us the figures and let’s discuss them,” she said, pointing out the government has not even consulted them on this proposal.

In a memorandum sent to Malacañang dated April 5, 2013, Tourism Secretary Ramon Jimenez Jr. pointed out that since the Philippines has not much to offer in terms of infrastructure, it aims to compensate in the are a of granting attractive fiscal incentives.

Jimenez stressed that for one to fully avail of these incentives, the necessary administration guidelines still have to be issued by concerned government agencies.

Republic 9593 gave the Tourism Infrastructure and Enterprise Zone Authority (TIEZA) formerly the Philippine Tourism Authority, an additional function to designate Tourism Enterprise Zones (TEZs). The TEZs are envisioned to attract investment through the designation and development of areas with varied and integrated tourism activities. Through TIEZA that these incentives such as the ITH should have been given to investors.