By Bernie Cahiles-Magkilat
Amid uncertainty in the country’s BPO industry pending the passage of the TRABAHO Bill, the second package of the comprehensive tax reform program, American knowledge process outsourcing Oracle NetSuite said in all certainty that it will continue expanding its operations here.
Oracle NetSuite Executive Vice President Evan Goldberg said he was not aware of the changing taxation system in the Philippines as he pledged that NetSuite’s huge operations in the country continue.
“I haven’t heard of anything that will stop from continuing, growing. It (Philippines) is the life of the organization over the years, I don’t see that changing at all,” said Goldberg, founder of NetSuite, which was acquired by Oracle almost three years ago.
Proud of the Philippine operation, Goldberg cited the Philippines for being a great resource for the global operation of Oracle NetSuite, a leading provider of cloud-based solutions to enterprises.
“We do a ton of operations in the Philippines. It is the life of the organization over the years, I don’t see that changing at all it’s been a big part of our growth, great resources. It has been a great part of our success over the years and I don’t see that changing at all,” he added.
NetSuite operates a knowledge process outsourcing hub and as technical support for its global operation in the Philippines where it has approximately 1,600 employees.
Jason Maynard, NetSuite senior vice-president for global field operations, also said that NetSuite Philippines is doing an amazing job.
Goldberg added they are absolutely expanding the Philippine operations stressing he knew that well as he is directly responsible in the approval of all the investments and programs for the Philippines.
“I knew because I signed all of that. We are expanding for sure,” he said.
Charito M. Plaza, director-general of the Philippine Economic Zone Authority (PEZA), is the lone government official opposing the proposed TRABAHO Bill crafted by the Department of Finance. Plaza’s action is in consideration of PEZA locators, which have also objected to the amendment of the existing tax incentives.
The TRABAHO Bill seeks to reduce corporate income tax overtime from the current 30 percent, but will put a cap on income tax holiday and the perpetual 5 percent tax on gross income earned. Once passed, it will also abolish the bias on nationality rule and remove the export and domestic requirement of investors.
These reforms on incentives will effectively reduce the tax perks enjoyed by PEZA locators, which the DOF said had bled the government coffers with P66 billion in foregone taxes in 2015 alone.
But Plaza countered that based on the TIMTA (Tax Incentives Management and Transparency Act) report, income from exports, local purchases of industries of PEZA companies showed that for every P1 in foregone revenue P14 had been plowed back to the domestic economy in the form of jobs creation, domestic purchases (P256 billion in 2016), development in the countryside, government taxes, among others.
PEZA directly employs more than 1.4 million workers, on top of the indirect jobs created by the various industries such as logistics, maintenance, support services and facilities.
“Our incentives are working effectively, investors are happy, contented and continuously attract investors, why are we changing, why are we fixing there is nothing broken,” concluded Plaza.
The DOF, however, said that the current incentives will be replaced by a much superior incentive packages that would be relevant to investors.