The IT and Business Process Association of the Philippines, the country’s biggest organization of business process outsourcing firms, has agreed to the transfer of registration of BPO companies from the Philippine Economic Zone Authority to the Board of Investments. The Fiscal Incentives Regulatory Board decided the transfer for BPO firms to enjoy 100 percent work -from-home arrangements.
“After two years of making a case for what the benefits of WFH/hybrid work are, it is great news that the FIRB will be facilitating a smooth paper transfer of the registration of IT-BPM enterprises from the PEZA to the Board of Investments,” the group said in a statement on Monday.
The group said this would not involve physically relocating their operations or giving up the incentives they currently enjoy.
“This is a wonderful outcome to IBPAP’s staunch advocacy for WFH/hybrid work. We are extremely thankful to our partners in the government for listening to the sector and its employees in adapting to flexible work arrangements in the future of work,” according to the group.
The IBPAP maintained that WFH/hybrid work is a game-changer for the Philippines and the sustainability of the IT-BPM industry, and it will be a contributing factor to our ability to create 1.1 million new direct jobs for Filipinos, generate billions more in revenue, and significantly increase our countryside footprint by 2028.
“We are also grateful to have the constant assistance and guidance of PEZA and BoI throughout everything that has happened. We will continue to work with them and our other stakeholders to iron out the details and process of this paper transfer,” the group stated.
PEZA coordinating with FIRB
Meanwhile, PEZA OIC-director general Tereso Panga said they are working closely with the FIRB “as they align with our current policies and the best interest of our industries that will keep, expand and grow our IT sector in the country,” but seeking a more permanent solution which is a proposed bill that will allow the PEZA IT locators to avail of WFH with incentives that will put them on an equal footing with BoI — registered business enterprises.
Panga mentioned that proposed measures have already been filed that will bring light to the intricacies of the WFH arrangement, such as Senate Bill 135 authored by Sen. Joel Villanueva and Senate Bill 414 led by Senator Imee Marcos on the proposed amendment to Section 309 of the Corporate Recovery and Tax Incentives for Enterprises Act.
Section 309 of the CREATE Act provides the precedent to avail of the tax incentives, stating that a qualified registered project or activity under an investment promotion agency administering an economic zone or freeport shall be exclusively conducted or operated within the geographical boundaries of said zone or freeport.
Also, Panga said other proposed bills are SB 175 filed by Sen. Francis Tolentino and SB 643 by Sen. Marcos on the proposed amendment to the Telecommuting Law; and Senate Resolution 125 by Sen. Grace Poe to conduct an inquiry in aid of legislation on the implementation of the Telecommuting Act with the end goal of promoting WFH and Hybrid work arrangements.
The FIRB last week resolved to allow IT-BPM/BPO firms in economic zones to adopt up to 100 percent WFH arrangement and still enjoy tax incentives if IT-BPM/BPO firms transfer registration from the PEZA register to the BoI.
As agreed at the FIRB meeting last 14 September, IT-BPM/BPO firms can become eligible for increased WFH setup by shifting their registration from the Authority to the BoI.
Trade Secretary Alfredo Pascual, who sits as co-chair of FIRB and chair of both PEZA and BoI, has assured that the procedure for transfer of registration from PEZA to BoI will be seamless and carried out expeditiously.
He clarified that IT-BPM firms that will transfer or register with the BoI could retain their physical location within PEZA or in any ecozone, adding that the up to 100 percent WFH scheme would also be available to IT-BPM/BPO firms that will be registered for tax incentives in the future.
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