BETTER DAYS
Senator Sonny Angara
When lockdowns were enacted throughout the pandemic, governments across the world implemented schemes to support businesses who were transitioning to or were already maintaining work-from-home (WFH) arrangements.
For instance, in June 2020, the Malaysian government included in its National Economic Recovery Plan tax incentives for companies that were implementing flexible work arrangements (FWAs). In particular, double deductions were given to FWA companies for their expenses on software subscriptions, capacity development, and consultation fees. And employees who received cell phones, tablets, or notebooks from their employers were also eligible for individual income tax exemptions for these items.
When the Singaporean government implemented its circuit breaker lockdown in April 2020, it announced that existing Work-Life Grants from the Ministry of Manpower would be easier to access by businesses who were already implementing FWAs such as flexi-load, flexi-place, and flexi-time. Where businesses previously needed to be implementing FWAs for six months before becoming eligible for the grant, this requirement was shortened to only one month with the Circuit Breaker. Under the Work-Life Grant scheme, enterprises could either receive over two years an FWA incentive of up to SG$70,000 or a job-sharing incentive for professional, managerial, executive or technical (PMET) employees worth up to SG$35,000.
In May 2021, the Tokyo government offered companies subsidies worth a little more than US$7,000 if at least 70 percent of their staff work from home three days a week for three months. The move was meant to subsidize the cost of purchasing software and equipment to enable telecommuting. The rationale for these financial incentives that lasted until September 2021 was to lower the number of people commuting to work.
Similar schemes were implemented in the United Kingdom, Canada, India, and many other countries across the world — all in the name of encouraging people to stay home amid the pandemic. There were other governments though who used the growing ubiquity of WFH arrangements to entice people to move to their respective communities.
One example is Vermont, USA who capitalized on the pandemic-induced exodus of people from major USA cities to revive a Work Relocation Grant program that started in 2018. Before the pandemic, would-be movers to Vermont would be given up to US$7,500 as reimbursement for the costs of relocating. When the pandemic hit, the grants were made available to applicants who were working remotely even for out-of-state employers.
At the beginning of the pandemic, programs like that of Vermont were few and far between across the US. But at present, according to MakeMyMove a startup that provides “one-stop-shop” services for remote workers, up to 70 communities across the United States now have similar schemes for incentivizing these workers to relocate in a bid to invigorate local economies. Such moves are not superfluous, considering that according to the 2022 America Opportunity Survey by McKinsey, there are already an estimated 55 million fulltime remote workers across the US.
Here in the ASEAN, Indonesia is preparing to make the most of this shift in working arrangements and pivot it to bring new life to its tourism. In June 2021, Indonesian minister of tourism Sandiaga Uno announced that steps were being taken for the country to start offering digital nomad visas to foreigners that exempt them from taxation if their income is solely sourced from outside Indonesia. While the proposed policy has yet to actually be rolled out, expatriate remote workers have already flocked to Bali, Indonesia’s premier tourist destination — for years prior to the pandemic.
All these developments point to a new normal that has emerged in light of the pandemic — one that our economic managers have finally recognized. Recently, the Fiscal Incentives Review Board (FIRB) decided to allow IT-BPO companies operating in economic zones to retain their WFH arrangements and still enjoy the tax incentives granted to them. These companies simply have to transfer their registration from the Philippine Economic Zone Authority (PEZA) to the Board of Investments (BOI).
This decision is more than welcome, as it ends months of anxiety and ambiguity for the IT-BPO industry, which was among a small handful of sectors that actually grew throughout the pandemic. It currently employs up to 1.44 million Filipinos.
The WFH setup may not be applicable to all enterprises. But clearly there are some businesses where this arrangement is ideal not least because of its flexibility. Ultimately, that makes adopting such a scheme a question of empowering employees to strike a better balance between their home and work lives. It also opens up the opportunity for talented individuals to earn high incomes while living outside of our urban centers, which bodes well for spurring growth and promoting prosperity to more parts of our country.
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Senator Sonny Angara has been in public service for 18 years — nine years as Representative of the lone district of Aurora, and nine as Senator. He has authored and sponsored more than 250 laws. He is currently serving his second term in the Senate.