Gov't grants new tax incentives to tourism firms, common tower builders

MANILA, Philippines — The Fiscal Incentives Review Board (FIRB) approved tax incentives for enterprises engaged in tourist accommodation and the construction of telco towers. 

The decision was handed out on January 6, which the Marcos Jr. administration hoped will accelerate the economy’s recovery. The tourism industry was one of the worst-hit sectors in the country amid pandemic lockdowns.

Revenues from the tourism sector as of November 2022 were pegged at P149 billion ($139.3 million). 

The World Travel and Tourism Council said that the local industry contributed an estimated $41 billion to the domestic economy in 2021. 

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“As we attract all types of big-ticket local and foreign investments into the country, we also strive to be inclusive and not industry-specific in our grant of fiscal incentives. Largely, what we want to ensure is for these projects to result in a win-win situation for both the registered business enterprises and the economy,” said Finance Sec. Benjamin Diokno.

Tax incentives for common passive telco tower infrastructure construction companies are part of the national government’s efforts to speed up digitalization in the country. The digitalization of government processes is one of the cornerstone policies of the Marcos Jr. administration.

On the other hand, the FIRB is finalizing guidelines that will provide uniform rules for imposing penalties on registered business enterprises (RBEs) that fail to comply. The guidelines cover the suspension or withdrawal of tax incentives and reversal of project registration for these enterprises. 

The pandemic-era legislation, Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act, granted these powers to the FIRB. 

The FIRB will release the guidelines once it completes a public consultation by the end of January.