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Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Philippines

SEVENTEENTH CONGRESS
Second Regular Session

7333

HOUSE BILL NO.

INTRODUCED BY REPRESENTATIVE ALFRED VARGAS

EXPLANATORY NOTE

Tourism is an important part of our country’s development plans, The
Philippines’ rich diversity, beaches, mountains, rainforests, islands, and diving
spots attract more than four million visitors from around the world. The industry
is also vital in economic development as it has contributed 7.8% to the country’s
gross domestic product. Thus, not only does tourism help spread our heritage, it
also supports the grassroots economy, advances work creation, and increases
consumption of local products and services.

In the effort at establishing tourism as one of the principal engines of
growth in the country, the legislature enacted Republic Act No. 9593, also known
as the "Tourism Act of 2009,” which primarily seeks the development ofa national
tourism action plan. Among other things, the Tourism Act mandates the Philippine
government to support the creation of Tourism Enterprise Zones (TEZs)! and
authorizes the Tourism Infrastructure and Enterprise Zone Authority (TIEZA), to
grant incentives to tourism enterprises within a TEZ for a period of ten years from
the effectivity of the Act in order to spur investments in sustainable tourism
developments’. These incentives include income tax holidays, gross income
taxation of five 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.?

However, after almost nine years since the enactment of the Tourism Act,
the TIEZA has been unable to grant the incentives mandated by the law because
the necessary revenue regulations for these incentives were only approved and
released on 15 November 2016.‘ As a result, the country fell short in achieving its
targets set forth by the National Tourism Development Plan 2011-2016.

Section 3(q) of the Tourism Act of 2009.

* Section 85 of the Tourism Act of 2009,

* Section 86 of the Tourism Act of 2009.

“Committee Report No. 169 re: Senate Resolution No. 113, entitied: “Resolution directing the Committee on
‘Accountability of Public Officers and investigations (Blue Ribbon) to conduct an inquiry, in aid of legislation, into

the possible malfeasance, misfeasance, and nonfeasance of public officers in the implementation of Republic Act
No. 9593, otherwise known as the Tourism Act of 2009.”


This bills seeks to rectify this by amending Section 85 of the Tourism Act
and extend the effectivity of the incentives schemes provided for another seven
years.

In view of the foregoing, the immediate approval of this measure is sought.

‘ALFRED VARGAS

* counterpart of Senate Bill No. 1616, sponsored by Senator Richard Gordon in the 17" Congress


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Philippines

SEVENTEENTH CONGRESS
Second Regular Session

7333

HOUSE BILL NO.

INTRODUCED BY REPRESENTATIVE ALFRED VARGAS

AN ACT

AMENDING CHAPTER V, SECTION 85 OF REPUBLIC ACT NO. 9593,
OTHERWISE KNOWN AS THE “TOURISM ACT OF 2009”

Be it enacted by the Senate and the House of Representatives of the Philippines

in Congress assembled:

SECTION 1. Section 85 of Republic Act No. 9593 is hereby amended to read

as follows:

Section 85. General Principles on the Grant and Administration of

Incentives ~

(a) Recognizing the strategic economic importance of tourism, the
necessity that investments within the TEZs be properly coordinated
with environmental, cultural, and developmental imperatives, and the
fundamental differences between the export manufacturing and
tourism industries, the TIEZA shall have sole and exclusive jurisdiction
to grant the incentives hereinafter provided.

In the formulation of rules and regulations defining and implementing
these incentives, and without derogating therefrom, the TIEZA may
coordinate with the Board of Investments and other government
agencies or entities responsible for the grant and administration of
incentives to assist in the development of a rationalized national
investment incentive policy.

In the grant of incentives, it shall give equal preference to large
investments, those with great potential for employment generation and
those of local small and medium enterprises. Registered tourism
enterprises owned and operated by overseas Filipino investors shall
enjoy the same incentives granted to TEZ operators and registered
enterprises in general. The amount of required investments shall be
defined in the implementing rules and regulations of this Act. The
incentive schemes set forth in Sections 86, 87, and 88 shall be in effect
for a period of [ten (10)] SEVENTEEN (17) years from the effectivity of


this Act, which period is subject to review by the Joint Congressional
Oversight Committee on Tourism.”

xX xX X

SEC. 2, Repealing Clause. - All laws, decrees, orders, rules and regulations
or other issuances or parts thereof inconsistent with Section 1 of this Act are
hereby repealed or modified accordingly.

SEC. 3. Effectivity Clause. - This Act shall take effect after fifteen (15) days
following the completion of its publication either in the Official Gazette or in a
newspaper of general circulation in the Philippines.

Approved,