NextGen Day

The Fiscal Incentive Review Board’s decision to permit 100% work-from-home (WFH) arrangements for the IT and business process management (IT-BPM) industry has been hailed by the Information Technology and Business Process Association of the Philippines (IBPAP).

“It is wonderful news that the FIRB will be facilitating 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 Monday. “After two years of making a case for what the benefits of WFH/hybrid work are,” the statement continued.

On September 14, the FIRB determined that moving the registration of IT-BPM enterprises from PEZA to BOI would allow WFH setup for those businesses without affecting their financial incentives.

According to the group, “this will not require physically moving their activities or giving up the advantages they are currently taking advantage of.”

The IBPAP has also expressed gratitude to the FIRB Board, which consists of the Departments of Finance, Trade and Industry, Budget and Management, and the National Economic Development Authority, for considering the IT-BPO industry’s and its employees’ call for the adoption of flexible work arrangements.

WFH/hybrid work, according to IBPAP, “is a game-changer for the Philippines and the sustainability of the IT-BPM industry. It will contribute to our ability to create 1.1 million new direct jobs for Filipinos, generate billions more in revenue, and significantly expand our countryside footprint by 2028.”

The FIRB ordered IT-BPM businesses registered with PEZA on April 1 to end the hybrid work arrangement because the government wanted to encourage workers to go out and support the economy.

Economic zone residents who did not adhere to the need for 100 percent on-site employment are no longer eligible for tax benefits such as an income tax holiday or a special corporate income tax of 5 percent in place of V.A.T., income tax, and local business tax.

BOI and PEZA are eligible for the same tax benefits under the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Law. However, the one-stop solution offered by PEZA makes it simpler for investors to register their projects and shields them from bureaucracy.

However, projects to be registered with PEZA need to be located within economic zones, unlike BOI.

PEZA does not register IT-BPM projects in Metro Manila as part of the government’s effort to develop opportunities in the countryside. However, businesses registering with the BOI can place their projects anywhere in the Philippines.

Businesses in the IT-BPM sector can now establish themselves and grow in Metro Manila thanks to the change in registration from PEZA to BOI, but they will no longer have access to PEZA’s brand of services.

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