Jul 14, 2020

BOI approves investment incentives for tourism businesses

According to a press statement of the Department of Trade and Industry (DTI), the tax incentive is in response to the request of Tourism Secretary Bernadette Romulo-Puyat for those who are modernizing their facilities to ensure the health, safety, and wellness of their clients.

The Board of Investment (BOI) has approved a package of investment incentives for tourism and tourism-related industries that are upgrading and modernizing their facilities in view of the new normal brought by the coronavirus disease (COVID-19) pandemic.

According to a press statement of the Department of Trade and Industry (DTI), the tax incentive is in response to the request of Tourism Secretary Bernadette Romulo-Puyat for those who are modernizing their facilities to ensure the health, safety, and wellness of their clients.

DTI Secretary and BOI Chairman Ramon Lopez said that the tourism sector is one of the major sectors affected during the health crisis and the investment incentives will help to continue and recover the business operations.

“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,” Lopez said.

BOI crafted and approved the policy to help the tourism sector following discussions with the Department of Tourism (DOT) on the tourism stakeholders’ plea on the possible measures to ensure continuity of their business operations.

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, the statement said.

“Tourist accommodation facilities who would like to undertake improvements to make their facilities COVID-proof may consider registration of such with the BOI as modernization projects subject to qualification requirements,” Secretary Lopez said.

Tourist accommodation facilities who would like to undertake improvements to make their facilities COVID-proof may consider registration of such with the BOI as modernization projects subject to qualification requirements, said Lopez.

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.

The renovation of guestrooms, food and beverage outlets, function or 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; the building of full, partial or movable partitions; installation of built-in thermal scanners, hygiene gates, and/or booths; upgrade or improvement of ventilation, air conditioning, air filtration systems, water systems, water treatment facilities (STP); a mobile check-in system; non-touch or no contact door lock systems and non-touch control panels in elevators and other areas are examples of upgrades or renovations that can qualify for tax incentives.

For tourist transport, these should be locally-assembled vehicles with sanitation features.

“For existing tourism accommodation facilities in Boracay, which is currently covered by the locational restriction policy, the BOI will look into the possibility of likewise qualifying their COVID-proof improvements as modernization projects that may be entitled to a three-year income tax holiday (ITH) incentive.”

Lopez said that BOI will continue to work closely with the tourism department in the review of their relevant policies to “provide the necessary support to tourism stakeholders and restore industry vigor and growth at the soonest possible time”.

 

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