The travel industry shareholders are requesting a postponement of payment for the local business taxes this year, given the extreme effect of the COVID-19 pandemic are on the operations of the businesses.
In a letter to Department of the Interior and Local Government (DILG) Secretary Eduardo Año, Tourism Congress of the Philippines (TCP) president Jose Clemente III said the group has gotten reports from partners that different local governments have been giving evaluation charges for business taxes, which most can't pay because of the present status of the travel industry.
“Most only earned income during the first quarter of 2020, with nothing else after that,” Clemente said.
He also said that some LGUs do not take into consideration business conditions for the year 2020, for they are basing assessment fees on 2019 income.
“In this regard, we would like to respectfully request if the Department of the Interior and Local Government can defer the payments of business taxes for 2021 in light of the pandemic and its adverse effects on the tourism (industry),” Clemente said.
The tourism industry has been shut down since mid-March last year and most shareholders cannot pay for those assessments since they lack the resources to do so, the TCP official emphasized.
“We would appreciate any assistance the DILG can extend to the tourism stakeholders on this matter,” Clemente said.
Given the travel restrictions imposed to prevent the coronavirus from spreading, the tourism industry has been among the hardest hit by the COVID-19 pandemic. International visitor arrivals dropped 83.97 percent from 8.2 million arrivals in 2019 to 1.3 million in 2020, according to the data from the Department of Tourism (DOT)
This resulted in an 83.12 percent drop in the inbound tourism receipts for the year 2020 from P482.16 billion of the year before to P81.40 billion.
In a different letter to Año, Tourism Secretary Bernadette Romulo-Puyat endorsed the letter of the TCP and a similar letter from the Philippine Travel Agencies Association (PTAA) on their solicitation for the conceivable suspension of payment of local business taxes and augmentation period for the documenting of business permits to operate for 2021.
“It may be recalled that in one of the IATF meetings, it was discussed that the DILG would encourage LGUs to defer payment of local business taxes, in consideration of dire financial straits of certain businesses,” Puyat said. Puyat also mentioned, "In this regard, we hope that your good office may review the attached requests, and extend any possible assistance to our tourism stakeholders as we work towards the recovery of the industry."
Among the earlier recommendations of the shareholders to aid the recovery of the tourism industry is the delaying of corporate and individual taxes for 2020 for accredited tourism stakeholders and the delaying of payments for licenses and permits for 2020 and 2021.