Senate passed this month the Tourism Act which is expected to boost the tourism industry in the country through fiscal and non-fiscal incentives to tourism investors.
Principally authored by Senator Richard Gordon who was Secretary of the Department of Tourism before becoming senator, the Tourism Act will give tourism zone operators and locators an income tax holiday for six years. This may be extended to another six years if the enterprise undertakes substantial expansion before the expiration of the initial six years. Only a 3% gross income tax would replace all taxes except taxes on real estate.
Moreover, tourism business outside of tourist zones may be granted tax incentives upon recommendation of the DOT.
Under the Tourism Act the Philippine Tourism Authority (PTA) would be reorganized to form the Tourism Enterprise Zone Authority (TEZA) which will be tasked to get investors to develop tourism zones.
It is not, however, certain whether the President would sign the bill into law after officials of the Department of Finance said the legislation could put the investment incentives program in disarray.
The Department said the bill could result to huge losses in tax income already accruing to the government.
