In a significant move to safeguard the recovery and growth of the Philippine tourism industry, the Department of Tourism (DOT) and the Department of Finance (DOF) reaffirmed their joint commitment to resolving critical business hurdles during a high-level meeting held Friday, January 9.
Tourism Secretary Christina Garcia Frasco and Finance Secretary Frederick D. Go convened to address the implementation of the Bureau of Internal Revenue’s (BIR) Revenue Memorandum Circular (RMC) No. 5-2024. The meeting focused on the RMC’s expanded tax exposure for foreign service providers, a policy that currently impacts Philippine hotels, travel agencies, and tourism associations.
The secretaries highlighted several strategic steps to support the industry:
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Formation of a Technical Working Group (TWG): To ensure a balanced approach to taxation, the DOT will lead a new TWG alongside the DOF and the BIR. This group is tasked with reviewing the specific concerns of tourism operators and finding sustainable solutions to mitigate the financial impact on local partners.
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Establishment of a Quick-Response Fund: Recognizing the sector’s vulnerability to natural disasters, both departments agreed to explore the creation of a dedicated quick-response fund. This initiative aims to provide immediate financial relief and ensure business continuity for tourism stakeholders during times of calamity. “Our goal is to create a fiscal environment that allows our tourism partners to thrive while ensuring the industry remains resilient against unforeseen challenges,” stated Secretary Frasco.
This partnership marks a proactive effort by the government to harmonize fiscal policy with sectoral needs. By addressing taxation complexities and disaster preparedness simultaneously, the DOT and DOF aim to strengthen the Philippines’ position as a competitive and stable destination for both domestic and international tourism investment.
