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5:45 pm on 17 September 2022, Saturday
A House leader has lauded the decision of the Finance department to allow business process outsourcing (BPOs) companies to keep their work-from-home arrangements and benefit from tax incentives if they register with the Board of Investments.
House Ways and Means Chair Joey Sarte Salceda earlier proposed this compromise as a solution to the problem of BPO companies having to be onsite as registered exporters if they want to keep their fiscal incentives under the Tax Code.
“If they are registered with the Board of Investments instead of the Philippine Economic Zone Authority, we get rid of the problem of not being allowed to do work-from-home arrangements,” Salceda said.
The Albay solon first requested this solution in June. The House tax chair suggested this as a compromise so that BPOs do not violate exporter rules, while also ensuring that the work-from-home arrangement can be sustained.
“I am very thankful that the DOF and the DTI heeded our proposed compromise. I wrote to the DOF, then under Secretary Dominguez at the time, and also made repeated personal appeals to Secretary Diokno on the matter,” Salceda said.
He added that “the spirit of the CREATE Law, which sets the tax incentives policy of the country, is to encourage countryside investments and productivity. Work from home allows call center agents to work in the countryside without having to bear with Manila costs. That helps our labor competitiveness and also creates demand in the countryside.”
The legislator said that he sees this as a “win-win” situation “BPOs get to keep their tax perks under the BOI, which has more performance-based incentives than PEZA, so that the latter can focus on manufacturing such as the electronics sector.”
Salceda noted that the shift towards BOI will eventually get rid of the practice of having floors or buildings classified as PEZA zones, which causes plenty of tax leakages.
“So, the country wins. The worker wins. The government wins. And the BPO sector wins. It’s an elegant solution, and I thank Secretary Diokno for seeing the wisdom in it,” Salceda added.