Tourism Act of 2009: Tourism Infrastructure and Enterprise Zone Authority (TIEZA)

This is Part 4/8 of the discussion on Republic Act No. 9593, also known as The Tourism Act of 2009.

The Tourism Infrastructure and Enterprise Zone Authority (TIEZA), which shall have an authorized capital of P250 Million fully subscribed by the National Government, shall be under the supervision of the Secretary and attached to the DOT for purposes of program and policy coordination.

The TIEZA shall be exempt from the payment of corporate income tax.

Mandate. – The TIEZA shall be a body corporate which shall designate, regulate and supervise the TEZs established under this Act, as well as develop, manage and supervise tourism infrastructure projects in the country. It shall supervise and regulate the cultural, economic and environmentally sustainable development of TEZs toward the primary objective of encouraging investments therein. It shall ensure strict compliance of the TEZ operator with the approved development plan. The TIEZA shall have the power to impose penalties for failure or refusal of the tourism enterprises to comply with the approved development plan, which shall also be considered a violation of the terms of accreditation.

In addition to its mandate to regulate and supervise TEZs, the TIEZA shall likewise be deemed a government infrastructure corporation under the the Administrative Code of 1987 (Executive Order No. 292).

Tourism enterprises outside of TEZs and without accreditation shall be governed by pertinent laws, rules and regulations.

General Powers and Functions of the TIEZA Board. – The TIEZA Board shall have the general powers of a corporation as provided under the Corporation Code. Furthermore, it shall also have the following powers:

1. Organize the TIEZA in a manner most efficient and economical for the conduct of its business and the implementation of its mandate.
2. Develop policies, plans and programs in coordination with the Department for the development and operation of TEZs and adopt rules and regulations necessary for the implementation of the provisions of this law.
3. Enter into, make, perform and carry out contracts of every class, kind and description which are necessary or incidental to the realization of its purposes with any person, firm or corporation, private or public, and with foreign government entities.
4. Contract loans, indebtedness and credit, issue commercial papers and bonds, in any local or convertible foreign currency from international financial institutions, foreign government entities, and local or foreign private commercial banks or similar institutions under such terms and conditions prescribed by law, rules and regulations.
5. Execute any deed of guarantee, mortgage, pledge, trust or assignment of any property for the purpose of financing the programs and projects deemed vital for the early attainment of its goals and objectives, subject to the provisions of the Constitution.
6. Construct, own or lease, operate and maintain infrastructure facilities or enter into joint ventures, and grant franchises for, and supervise the operation of, public utilities within TEZs, in coordination with LGUs and agencies concerned.
7. Undertake, or authorize the undertaking of, reclamation projects within TEZs.
8. Preserve, restore or reconstruct all national cultural treasures and shrines located within TEZs, in coordination with the National Museum and other concerned agencies.
9. Receive donations, grants, bequests and assistance of all kinds from local and foreign governments and private sectors and utilize the same.
10. Exercise eminent domain and police power, including, but not limited to, the ower to recommend to the Department the removal of structures which may be considered nuisances per se or which impede or impair the enjoyment of historical, cultural and natural endowments.
11. Coordinate with LGUs and other government agencies for the provision of basic services, utilities and infrastructure required by TEZs.
12. Review and approve proposals for the designation of TEZs based on the criteria provided herein, and approve, facilitate and assist in the organization of TEZ Operators.
13. Regulate and supervise the operations of TEZ Operators, review and ensure compliance with the development plans, and establish and implement other policies, plans and programs for the development and operation of TEZs.
14. Register, monitor and regulate enterprises seeking to invest and operate within a TEZ, and approve and grant incentives to such registered enterprises as provided under this Act.

Funding. – The TIEZA shall obtain the funds for its operations from the following:

1. 50% of the proceeds from travel tax collections.
2. A reasonable share from the collections of the Office of Resource Generation, to be determined by DOT.
3. Income from projects managed by the TIEZA.
4. Subsidies or grants from local and foreign sources that may be received by the TIEZA.

At least 5% from the travel tax collection which shall accrue to the TIEZA shall be earmarked for the development of historic, cultural, religious and heritage sites and prime tourist destinations. Another 5% shall be earmarked for the development of ecotourism sites in depressed provinces with strong tourism potentials.

Collection and Allocation of Travel Taxes. – The TIEZA shall be the principal agency responsible for the timely collection of travel taxes.

Amounts to be collected by the TIEZA shall be distributed in the manner provided for under this law, provided that the National Government shall look for alternative funding sources for programs funded by the travel tax in the event of a phase out of travel tax collection following international agreements.

The government’s contribution to the Higher Education Development Fund, equivalent to 40% from the total gross collections of the travel tax, shall be retained, but the CHEd shall give priority to tourism-related educational programs and courses. The 10% share of the National Commission for Culture and the Arts from the total gross collections of the travel tax shall likewise be retained.

Exemption from Payment of Corporate Income Tax. -

Registration. – Tourism enterprises within a TEZ shall register with the TIEZA to avail of incentives and benefits provided for in the law. A one-stop-shop shall be established to enable investors to register, including all necessary permits and licenses from all national and local government offices.

Investigation and Inquiries. – The TIEZA Chief Operating Officer shall have the power to inquire into and investigate the conduct of TEZ Operators, registered enterprises, and/or their employees, with the power to subpoena witnesses, administer oaths, and compel the production of books, papers, and other evidence. The TIEZA Chief Operating Officer shall thereafter make a recommendation to the TIEZA Board for appropriate action.

Back to Main Primer: Tourism Act of 2009 (RA 9593)
The Department of Tourism (DOT)
Shared Responsibilities of National and Local Governments
Tourism Promotions Board (TBP) and the Tourism Promotions Fund
Tourism Enterprise Zones (TEZ)
Incentives
Increased Tourist Access