WFH extension under discussion

The extension of the work-from-home arrangement for the Information Technology and Business Processing Management sector is still up for discussion, the Fiscal Incentives Review Board said on Thursday.

The FIRB has submitted a position paper to Finance Secretary Benjamin Diokno explaining that the Philippine Economic Zone Authority's decision to extend the WFH arrangement of the IT-BPM enterprises until March 2023 lacks a legal basis.

"To date, the current and effective resolution issued by the FIRB states that the WFH arrangement for the IT-BPM companies within the ecozones is only until 12 September 2022," Finance Assistant Secretary and FIRB Secretariat Head Juvy Danofrata said.

"Neither the Corporate Recovery and Tax Incentives for Enterprises Act nor the previous FIRB resolution gives any of the investment promotion agencies, such as PEZA, the power to allow the adoption of WFH arrangements unilaterally," she said.

The FIRB head said any move to extend the WFH arrangement beyond 12 September would need the approval of the Cabinet-level interagency body through a resolution.

"The resolution should be anchored on the extension of the State of Calamity or a declaration of the President of an exceptional circumstance, with Rule 23 of the CREATE Act IRR prevailing as its legal basis," Danofrata added.

She said that the FIRB Secretariat is already coordinating with the Board of Investments in studying options to allow the WFH arrangements for the PEZA's locators in the IT-BPM sector.

The assistant secretary said the matter would be discussed in the FIRB's next meeting mid-September.

Diokno, in a previous meeting, highlighted the importance of ensuring compliance among the FIRB stakeholders, including the IT-BPM locators, with the provisions under the CREATE Act to achieve an effective tax incentive regime in the country.

"The locators in economic zones must comply with the ongoing terms and conditions of their registration to continue receiving tax incentives as IPA-accredited businesses," Diokno said.