IT-BPO group welcomes gov’t nod on 100% WFH set-up

The Information Technology and Business Process Association of the Philippines (IBPAP) have welcomed the decision of the Fiscal Incentive Review Board (FIRB) to allow 100% work-from-home (WFH) arrangements for the IT and business process management (IT-BPM) industry.

“After two years of making a case for what the benefits of WFH/hybrid work are, it is great news that the FIRB will now  facilitate a smooth paper transfer of the registration of IT-BPM enterprises from the Philippine Economic Zone Authority (PEZA) to the Board of Investments (BOI),” the group said in a statement.

On September 14, the FIRB agreed to allow WFH set-up for IT-BPM companies without losing their fiscal incentives by transferring their registration from PEZA to BOI.

“This will not involve physically relocating their operations or giving up the incentives they currently enjoy,” the group said.

The IBPAP has also thanked the FIRB Board composed of the Department of Finance, Department of Trade and Industry, Department of Budget and Management, and the National Economic Development Authority for listening to the IT-BPO sector recommendation, along with their workers to adopt flexible work arrangements.

“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,” IBPAP added.

Last April 1, the FIRB ordered IT-BPM companies registered with PEZA to scrap the hybrid work arrangement as the government has aimed to stimulate economic activities by encouraging people to go out.

Those that did not comply with the 100-percent on-site work set-up within economic zones can no longer enjoy tax perks such as an income tax holiday or a 5% special corporate income tax in lieu of value-added tax, income tax, and local business tax.

Under the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Law, PEZA and BOI have the same fiscal incentives. However, PEZA boasts of a one-stop-shop service that makes it easier for investors to register their projects and protect them from red tape.

Unlike BOI, however, projects to be registered in PEZA should be located within economic zones. PEZA does not register IT-BPM projects in Metro Manila as part of the government’s thrust to expand opportunities in the countryside. On the other hand, firms registering with BOI can locate their projects anywhere in the Philippines.

For the IT-BPM industry, shifting their registration from PEZA to BOI means firms can set up and expand in Metro Manila but will no longer enjoy PEZA’s brand of service. (PNA)