Lopez dangles BOI tax perks to BPO firms
Business process outsourcing (BPO) firms registered with the Philippine Economic Zone Authority (PEZA) that are pursuing work from home or hybrid work arrangement may shift their registration with the Board of Investments (BOI) to ensure continuity in the availment of tax incentives.
This was proposed by Trade and Industry Secretary Ramon M. Lopez, who is also BOI chairman, amid conflict with the CREATE law that requires BPO firms under PEZA to fully conduct their operations in their approved economic zone or IT Building/Parks/Center.
Lopez explained that BPOs registered under the BOI will still be able to avail of the same set of incentives because there is no limitation as to their location where they have to perform or where they have to operate.
“There are no locational restrictions,” Lopez said of firms registered with BOI. “When you are registered with BOI you can locate anywhere, even outside the ecozone,” Lopez said during an ANC television program interview.”
This is an option while the next Congress may tackle revision of the law to allow hybrid work arrangement for BPO companies.
Lopez, who is also chairman of PEZA, said that PEZA is also working with their lawyers so they can adopt a liberal application of the 70-30 (export-domestic) sales ratio for export-oriented enterprises registered with PEZA.
Lopez said the move is to apply the same policy to firms that prefer to operate via a hybrid work arrangement. Once the legal issue is hurdled, 30 percent of the workforce of export-oriented firms registered with PEZA can fulfill their job at the comfort of their homes or remotely, and only 70 percent onsite or in their approved ecozone location.
Such effort, Lopez said, is in support of the BPO sector, the country’s largest employer and leading dollar earner.
During the pandemic, the Fiscal Incentives Review Board (FIRB) has allowed IT-BPOs to operate 90 percent WFH and only 10 percent onsite. But the privilege already expired on March 30 this year.
The Department of Finance though has ordered these firms to return to their physical offices in the ecozones or lose their incentives.