Senate passes tourism bill

The Senate has approved on third and final reading the Tourism Act, which aims to promote and develop the tourism industry as an engine of growth and development.

Sen. Richard Gordon, the principal author of the bill, welcomed the passage of the bill in the Senate, saying that it has the potential to bring in billions of revenues to the country.

"By promoting tourism now and by sending a signal to the whole world that we have a new tourism bill, we are creating landmark change in getting tourists into our country. We are ready now to advertise the country throughout the world and give the world an idea of what the Philippines is other than bombings, kidnappings. We can now show the brighter side of the Philippines which is good for our people abroad and good for our people here," Gordon said.

He said the bill would allow the government to invite investors in the tourism industry by introducing them to the Tourism Enterprise Zones where certain fiscal and non-fiscal incentives may be availed of by investors.

The new tourism bill provides that the Philippine Tourism Authority (PTA) would be reorganized to form the Tourism Enterprise Zone Authority (TEZA), which would be in charge of getting investors to develop the tourism zones.

The assets and liabilities of the PTA would be held in trust and managed by a special committee composed of the secretaries of Tourism, Finance and Budget and Management.

When economically feasible and financially viable, assets may be assigned to the TEZA for sale, lease or development into zones.

Gordon explained that the PTA has become obsolete because it became just a "property owner or manager."

"It just rents out (facilities) or just runs hotels, and horror of horrors, it does not make any money. It actually makes money from only one asset – the rent from the Tagaytay Park," he said.

The bill would also pave the way for the reorganization of the Philippine Conventions and Visitors Corp., which will become a new entity to be called Tourism Philippines (TP).

The bureaus for Domestic and International Tourism Promotions and the Office of the Tourism Information and Product Development of the Department of Tourism (DOT) would also be placed under TP.

Moreover, the operation and supervision of foreign field offices of the DOT would be transferred to TP, which will be tasked to market and promote the Philippines as a major global tourism destination.

One of the incentives to be provided to zone operators and locators is an income tax holiday for six years, which may be extended to another six years if the enterprise undertakes a substantial expansion or upgrade of its facilities prior to the expiration of the initial six years.

In lieu of all other national and local taxes, except real estate taxes and TEZA fees, a new tourism enterprise shall pay a tax of three percent on its gross income.

However, Finance Undersecretary Gil Beltran said these proposed tax incentives for the tourism industry would throw the country’s investment incentives program into disarray.

Gordon allayed this concern as he said the loss of tax opportunities with the development of the Tourism Enterprise Zones would be compensated by the new jobs that would be created inside the zones and these could provide a new tax base for the government.

"When tourists come in they will be bringing in dollars," he added.

The House of Representatives is expected to pass its own version of the bill before the 13th Congress adjourns. – With Des Ferriols