The Tax Incentives Review Board (FIRB) has temporarily extended the work-from-home (WFH) arrangement for information technology and business processing management (IT-BPM) companies until the inter-agency body makes a final decision next week.
“Given the expiration of the resolution on September 12, 2022, it is only fair that we extend the WFH agreement for IT-BPM companies until we finalize a resolution addressing the issue,” Finance Secretary Benjamin E. Diokno, who is also chairman of the FIRB, said in a statement.
Mr. Diokno issued a memorandum that temporarily extends the current arrangement allowing IT-BPM companies in the economic zones of the Philippine Economic Zone Authority (PEZA) to have 30% of their workforce to perform off-site work.
PEZA’s request to extend the WFH arrangement is one of the items on the agenda for the next FIRB meeting on September 15.
“Given the long-standing issue regarding the extension of WFH for the IT-BPM sector, we hope that the Board’s decision will finally bring clarity to the matter,” said Antonette C. Tionko, Undersecretary of the DoF and FIRB Technical Committee Chair.
“We listen to our stakeholders and see the WFH arrangement as the new business model for most registered commercial enterprises. Therefore, discussion of this issue at the next FIRB meeting requires more permanent action by the inter-agency body,” she added.
FIRB Resolution No. 017-22, which expires September 12, allows PEZA-registered IT-BPM companies to have telecommuting agreements for 30% of their workforce, while benefiting from tax incentives guaranteed by the Corporate Recovery and Tax Incentives for Businesses (CREATE) Act.
Last month, PEZA said the extension of the WFH for IT-BPM businesses until March 2023 had been “approved in principle” but pending “further clarifications” from the Department of Finance and the Board of Investments.
Earlier this month, FIRB Assistant Secretary for Finance and Head of the Secretariat Juvy C. Danofrata said in a statement that PEZA’s decision lacked a legal basis because existing laws do not give promotional agencies investment authority to unilaterally approve FMH agreements.
IT and Business Process Association of the Philippines (IBPAP) President and CEO Jack Madrid said last week that the FIRB’s position was “short-sighted and inconsistent with the goal of attracting and to retain investors in the country’s largest job-creating industry and contributor to foreign exchange earnings”.
“The longstanding impasse with the FIRB and its very public exchanges with PEZA on the issue of telecommuting/hybrid work is not only detrimental to our narrative of industry agility, innovation and resilience , but also to our positioning of the Philippines as an IT-BPM investment destination of choice,” Mr. Madrid said.
“IBPAP supports PEZA and its power to allow hybrid working for (registered business enterprises),” he added. – Diego Gabriel C.Robles