New Law Extends Tax Perks of TIEZA-Registered Enterprises to 10 Years
Tax incentives granted to enterprises registered with the Tourism Infrastructure and Enterprise Zone Authority (TIEZA) are now extended until December 2029, following the passage into law of Republic Act (RA) No. 11262, a new law that seeks to amend RA No. 9593, or the Tourism Act of 2009.
Though passed into law by President Rodrigo Duterte on April 10, official copies of the new law were only emailed by Malacañang to reporters last week, on May 27.
The old law, RA No. 9593, gives TIEZA “sole and exclusive jurisdiction” to grant tax incentives to tourism businesses, to extend the implementation of the incentive scheme for tourism enterprise zones (TEZs) for another 10 years. But it also stipulates that TIEZA only had until August 2019 to grant incentives. With the passage into law of RA No. 11262, such grants will be extended until December 2029.
The extension of tax perks is seen to generate more than 160,000 jobs and at least ₱222 billion in capital investments.
Through the extension, TEZ operators and Registered Tourism Enterprises (RTEs) can continue to avail of fiscal incentives such as the Income Tax Holiday (ITH), 5% Gross Income Taxation (GIT) Rate, and 100% exemption on all taxes and customs duties on imported capital equipment, as well as transport equipment and spare parts from tariffs and duties.
“Now that the sunset provision has been finally extended until 2029, TEZ operators and locators no longer need to worry about matters related to the availment of TIEZA’s incentives,” Tourism Infrastructure and Enterprise Zone Authority (TIEZA) Chief Operating Officer Pocholo Paragas said in a statement on Tuesday last week.
RA No. 11262 is a consolidation of House Bill (HB) No. 8861 and Senate Bill (SB) No. 1616, both known as “An Act Extending the Period for the Grant of Incentives to Tourism Enterprise Zones and Registered Tourism Enterprises” passed on February 2019.
