Section 88Sec./Art. 88

Incentives Available to Tourism Enterprises Outside TEZs. - The grant of fiscal and other incentives to tourism enterprises not located within TEZB shall be governed by the following provisions:

(a) Upon compliance with the requirements provided by law, they shall be entitled to avail of any economic incentives found under existing laws, such as Executive Order No. 226 (1987), otherwise known as the Omnibus Investments Code; Republic Act No. 7042, as amended by Republic Act No. 8179, otherwise known as the Foreign Investments Act; the Special Economic Zone Act; and the Bases Conversion and Development Act, among others, subject to the last paragraph of Section 86(a), at the option of the said enterprises.

(b) Subject to rules and regulations jointly promulgated by the Department and the TIEZA, an existing accommodation establishment not located within a TEZ shall be entitled to claim an income tax holiday for up to six (6) years for any significant expansion, renovation or upgrade in its facilities in relation to the amount of the original investment. They shall also be entitled to import capital equipment free of taxes and duties when necessary for such expansion, renovation or upgrade.

(c) Tourism enterprises may avail of incentives under the Omnibus Investments Code: Provided, That:

(1) Tourism activities shall always be included in the Investment Priorities Plan;

(2) Rules and regulations concerning the grant of incentives to tourism enterprises shall be jointly formulated by the Board of Investments and the Department;

(3) The income tax holiday provided under Section 39.1 of the Omnibus Investments Code shall also apply to existing accommodation enterprises undergoing substantial capital infusion for expansion or substantial upgrade of facilities; and

(4) Accredited tourism enterprises shall be entitled to import transportation and accompanying spare parts free of taxes and duties: Provided, however, That such transportation shall be exclusively used by the enterprise in its operations, and: Provided, further, That such are not manufactured domestically in sufficient quantity, comparable quality and prices.

(d) Tourism enterprises located in special economic zones, created under the Special Economic Zone Act or by special charter, shall continue to be governed by the same.

(e) The incentives offered under this Act shall be without prejudice to the availment of other incentives provided under other laws, such as, but not limited to, those concerning infrastructure, or micro - , small - and medium enterprises. However, where such laws provide for similar incentive schemes as those contained herein, the investor may elect to avail of the scheme provided only under one particular law, decree or issuance.

CHAPTER VI

DUTY AND TAX - FREE MERCHANDISING SYSTEM FOR TOURISM PURPOSES