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Tax benefits are still a major consideration in deciding whether or not to invest in PH, according to the IT-BPM group.
MANILA – The IT and Business Process Association of the Philippines (IBPAP), the country’s umbrella body for information technology (IT) and business process management firms, has emphasized the need of sustaining fiscal incentives in encouraging sector investment.
IT-BPO enterprises cherish government fiscal incentives, according to IBPAP president and CEO Jack Madrid, and they are frequently “the tiebreaker in their investment choices.”
“As a global leader in IT-BPM services, the Philippines derives its competitive advantage from Filipino talent, developing digital infrastructure, and strong government backing that fosters a business-friendly climate.” The Philippines’ global supremacy in the business is due to a harmonic combination of these qualities, according to Madrid in a statement.
Because the Fiscal Incentives Review Board (FIRB) ordered RBEs in the IT-BPM sector to bring back 100% of their operations in the office, some IT-BPM registered business enterprises (RBEs) have decided to forego their tax perks from the government in order to maintain the work-from-home (WFH) arrangement for IT-BPM employees.
RBEs that refuse to comply will forfeit their tax breaks.
“The choice by IT-BPM RBEs to renounce income tax benefits is a challenging interim solution to accommodate the needs of their staff and clients who prefer WFH/hybrid work arrangements. As a result, the industry is hoping that the FIRB will reverse its judgment and grant the IT-BPM industry the opportunity of fully executing the PEZA (Philippine Economic Zone Authority) Letters of Authority (LOA) on WFH,” Madrid stated.
Madrid said that the industry association maintains its position on hybrid work arrangements and the legal foundation for PEZA’s issue of a letter of authorization (LOA) to allow 30 percent WFH until September 12, 2022.
The IT-BPM sector’s revenues climbed to USD29.49 billion in 2021, a 10.6 percent rise over the industry’s revenues in 2020.
Despite the pandemic, the industry added 122,000 full-time employees, increasing the total number of FTEs in the sector to 1.44 million.
“If favorable conditions are maintained, growth expectations for 2022 and the medium term are as bright as they are today.” “The country’s regulatory and investment policies must be clear and consistent to retain and grow existing investments and to stimulate the influx of new investments,” he said.