THE TOURISM INFRASTRUCTURE AND ENTERPRISE ZONE AUTHORITY (TIEZA)

1. THE TOURISM INFRASTRUCTURE AND ENTERPRISE ZONE AUTHORITY (TIEZA) 1

2. SEC. 64. Mandate of TIEZA - Designate, regulate and supervise the Tourism Enterprise Zone (TEZ); - Develop, manage, and supervise tourism infrastructure projects ; - Supervise and regulate the cultural, economic and environmentally sustainable development of TEZs to encourage investments therein; - Ensure strict compliance with the approved development plan; and - Impose penalties 2

3. SEC. 65. Board of Directors. – • The Department Secretary, as Chairperson; • The TIEZA Chief Operating Officer, as Vice-Chairperson; • The TPB Chief Operating Officer; • The DPWH Secretary; • The DENR Secretary; • The DILG Secretary; and • Five (5) representative directors, to be appointed by the President, upon recommendation by the Tourism Congress for a term of office of three (3) years. 3

4. TOURISM ENTERPRISE ZONES (Sec. 59) Any geographic area with the following characteristics: a. Contiguous territory; b. Intrinsic merits c. Access; d. Sufficiency in size ; and e. Development catalyst. 4

5. Administration of Tourism Enterprise Zones TEZ OPERATOR. - A TEZ operator shall be an entity duly incorporated under the Corporation Code and other relevant laws, unless the TEZ operator is a LGU. TEZ ADMINISTRATOR, - appointed by the Operator to be responsible for implementing the policies, plans and projects of the TEZ operator's Board of Directors. 6

6. Fiscal Incentives - TEZ Operators / Registered Enterprises.(SEC. 86) In the discretion of the TIEZA Board, the following may be granted to tourism enterprises within a TEZ, to wit: 1. Income Tax Holiday - for a period of six (6) years; 2. Net Loss Carry Over - deduction from gross income of net operating losses for the next six (6) consecutive years immediately following the year of the loss; 3. Gross Income Taxation - five percent (5%) on its gross income earned which shall be distributed among a. affected LGUs; b. the national government; and c. TIEZA Exclusions; - Real estate tax and - Fees imposed by TIEZA 9

7. 4. Tax and duty Free Importation - capital investment and equipment. 5. Transportation Equipment and Spare Parts - Importation by new and expanding registered enterprises shall be exempt from customs duties and national taxes, provided: a. They are not manufactured domestically in sufficient quantity, of comparable quality and at reasonable prices, and b. They are reasonably needed and will be used exclusively by an accredited tourism enterprise. 6. Tax and duty Free Goods and Services - a. Importation of goods actually consumed in the course of services actually rendered by or through registered enterprises within a TEZ, and . b. A tax credit on all locally-sourced goods and services directly or indirectly used by the registered enterprise for services actually rendered within the TEZ. 10

8. 7. Social Responsibility Incentive - A registered enterprise shall be entitled to a tax deduction equivalent to a reasonable percentage, not exceeding fifty percent (50%), of the cost of environmental protection or cultural heritage preservation activities, sustainable livelihood programs for local communities, and other similar activities. 11

9. Non-fiscal Incentives : a. Employment of Foreign Nationals - in executive, supervisory, technical or advisory positions. b. Special Investor's Resident Visa - Investment of at least USD 200,000 in a registered enterprise. c. Foreign Currency Transactions  - Subject to the New Central Bank Act: • Right to repatriate the entire proceeds of the liquidation of the investment • Right to remit earnings • Right to remit such sums as may be necessary to meet the payments of interest and principal on foreign loans and foreign obligations arising from technological assistance contracts 12

10. Requisition of Investment - No requisition of the property of registered enterprises, - except in the event of war or national emergency, and - only for the duration thereof. e. Lease and Ownership of Land Lands and buildings in each TEZ may be leased to foreign investors - period not exceeding fifty (50) years, - renewable once for not more than twenty-five (25) years. Subject to the conditions set forth under the Investor's Lease Act. 14

11. Incentives Available To Tourism Enterprise Outside TEZs a. Investment Laws - Omnibus Investments Code - Foreign Investments Act - Special Economic Zone Act - Bases Conversion and Development Act b. An existing accommodation establishment not located within a TEZ shall be entitled to: - Income tax holiday; and • Tax and duty-free Importation of capital equipment necessary for expansion, renovation, or upgrade 15

12. Principles on the Grant of Incentives • The TIEZA shall have the SOLE and EXCLUSIVE jurisdiction on the grant and administration of incentives under RA 9593 • EQUAL preference: large investments = local small and medium enterprises = enterprises owned and operated by overseas Filipino investors;. • TIEZA shall determine the minimum amount of investment required to avail of the incentives. • 10 years for incentive schemes subject to review by the Joint Congressional Oversight Committee on Tourism. • LGUs are encouraged to provide incentives for tourism enterprises through reductions in applicable real estate taxes and waivers of fees and charges, among others. 8

13. THANK YOU!