New tourism law cuts wide path for billion dollar foreign investments
With incentives that are more generous than those given to export processing zones and one-stop shop processing, the new tourism bill slated for signing by President Gloria Macapagal-Arroyo in Cebu is drawing great interest from foreign domestic investors alike.
The Tourism Act of 2009, authored by Senator Richard Gordon, has cut a wide and deep channel for foreign investments in tourism to flow through.
"We are more than confident that the incentives under the law will attract investment in the billions. The Tourism Law which we sponsored is designed to replicate the success that is Subic all over the country," said Gordon.
Gordon's belief in the power of tourism to transform wastelands into havens for investment was proven true after investments in Subic reached $3 Billion a few short years after the United States abandoned it.
Dading Clemente, president of the Federation of Tourism Industries (FTI), compared the signing of the Tourism Act of 2009 to an anticipated announcement from Alan Greenspan - the former chairman of the US Federal Reserve.
"Almost every business that is involved in Philippine tourism is getting ready to take advantage of the opportunities that will be created by the Tourism Act. We're like stockbrokers waiting for a positive announcement from Greenspan, we're all banking on the imminent surge in Philippine tourism that is sure to follow," said Clemente.
The new tourism law provides measures that will make it easier for foreigners to set up business within tourism zones. Section 77 of the law mandates the TIEZA to establish offices where prospective Tourism Enterprise Zone investors can register to obtain incentives and benefits as well as all necessary licenses and permits.
Section 86 of the law provides for incentives such as income tax holidays spanning six years will be given to investors; gross income taxation of only 5 percent; 100 percent exemption on all taxes and customs duties on the importation of capital equipment; and the exemption of transportation and spare parts from tariffs and duties.
Foreign investors will also be allowed to lease land in the Philippines for a period of 50 years which can be renewed once for a period of 25 years.
The leasehold right acquired may be sold, transferred, or assigned subject to the conditions set by the Investor's Lease Act.