BOI OKs incentives for tourism firms that upgrade, renovate for ‘new normal’
The Board of Investments (BOI) has approved investment incentives for tourism and tourism-related industries that will upgrade and modernize their facilities to ensure the health, safety and wellness of their customers in the “new normal” brought by the COVID-19 pandemic.
The approval of incentives was in response to a request from Tourism Secretary Bernadette Romulo-Puyat, the BOI said Thursday.
“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,” Trade Secretary and BOI Chairman Ramon Lopez said.
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 BOI crafted and approved a policy to help the tourism sector.
The tax incentives to be granted by BOI are the following:
- Income tax holiday for a period of three years
- 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 prorated according to the amount of upgrade or renovation, the BOI said.
The investment agency noted that 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.
“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,” Lopez said.
For existing tourism accommodation facilities in Boracay, which is currently covered by the locational restriction policy, the Cabinet official said 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.
“While we currently have locational restrictions for new and expansion of tourism facilities in Boracay, we may qualify modernization of those in the area. All these, to help the tourism industry recover faster and provide comfort/safety in our tourism facilities,” Lopez said.
Tourist transports should be locally assembled vehicles with sanitation features to qualify for the incentives.
Likewise, motor vehicles to be acquired or to be upgraded or modernized will have such sanitation and hygiene features including but not limited to barriers, payment portals, deionizers, seat organizers for sanitation kits, and other features that would promote physical distancing.
Examples of facilities renovations or upgrade that can qualify tax incentives include the following:
- Renovation of guestrooms, food and beverage outlets, function/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
- 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)
- Mobile check-in system
- Non-touch or no contact door lock systems and non-touch control panels in elevators and other areas
“The BOI will continue to work closely with the DOT in the review of our relevant policies to provide the necessary support to our tourism stakeholders and restore industry vigor and growth at the soonest possible time,” Lopez said. — BM, GMA News