Published — December 28, 2020
The following post does not create a lawyer-client relationship between Alburo Alburo and Associates Law Offices (or any of its lawyers) and the reader. It is still best for you to engage the services of your own lawyer to address your legal concerns, if any.
Also, the matters contained in the following were written in accordance with the law, rules, and jurisprudence prevailing at the time of writing and posting, and do not include any future developments on the subject matter under discussion.
More on incentives for TEZ: INCENTIVES FOR TOURISM ENTERPRISE ZONE OPERATORS AND REGISTERED TOURISM ENTERPRISES
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Tourism enterprises outside Tourism Economic Zones (TEZs) may claim income tax holiday
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They may also be entitled to import capital equipment free of duties and taxes
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The grant of incentive is not automatic as they have to comply with the requirements of law
Moving rocks today strengthens you for moving mountains tomorrow.
– Matshona Dhliwayo
In our previous article, we wrote about Incentives for Tourism Enterprise Zone Operators and registered tourism enterprises. This time allow us to talk about tourism enterprises outside Tourism Economic Zones (TEZs).
Like TEZ operators and registered TEZs, are establishments not located within a TEZ entitled to incentives?
The law says:
Yes.
The grant of monetary and other incentives to tourism enterprises not located within the TEZ is dependent upon compliance with the requirements provided by law such as the Omnibus Investments Code or the Foreign Investments Act among others.
Also, subject to the rules and regulations jointly promulgated by the Department of Tourism and the Tourism Infrastructure and Enterprise Zone Authority (TIEZA), an existing accommodation establishment not located within a TEZ shall be entitled to income tax holiday.
In addition, such enterprises or establishments may avail of incentives under the Omnibus Investments Code provided that:
- Such tourism enterprises shall always be included in the Investment Priorities Plan;
- Rules and regulations concerning the grant of incentives to tourism enterprises shall be jointly formulated by the Board of Investments and the Department of Tourism;
- The income tax holiday shall also apply to existing accommodation enterprises undergoing substantial capital infusion for expansion or substantial upgrade of facilities; and
- Accredited tourism enterprises shall be entitled to import transportation and accompanying spare parts free of taxes and duties. However, please do note that such transportation should be exclusively used by the enterprise in its operations and such are not manufactured domestically in sufficient quantity, comparable quality and prices.
Furthermore, when such enterprise is located in special economic zones created under the Special Economic Zone Act, they shall continue to be governed by the same.
Finally, bear in mind that the enjoyment of the incentives mentioned above does not hinder the enjoyment of other privileges that may be availed of from different laws such as those concerning infrastructure, or micro-, small- and medium enterprises. But, if such laws provide for similar incentives as mentioned above, said tourism enterprise may elect to avail of the incentives provided only under one particular law, decree or issuance.
Alburo Alburo and Associates Law Offices specializes in business law and labor law consulting. For inquiries, you may reach us at info@alburolaw.com, or dial us at (02)7745-4391/0917-5772207.
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