BPO firms to return to on-site work on April 1 as gov't warns of tax perk removal!

The PH government wants the business process outsourcing (BPO) industry to return to office by April 1, 2022.

A BPO office pre-pandemic (Photo from Business World)

For economic reopening?

The Fiscal Incentives Review Board (FIRB) turned down requests to extend remote-work arrangements. This means that companies from the information technology-business process management sector would have to require their whole workforce to report to the office by April this year. 

There were reports previously that the Philippine Economic Zone Authority (PEZA) has been pushing to extend the WFH arrangements for companies located in economic zones until September 12, 2022. PEZA is an investment promotion agency where multiple IT-BPM firms are located to enjoy fiscal incentives.

The Information Technology and Business Process Association of the Philippines (IBPAP) had wanted work-from-home for some employees to stay until September, so they could first adjust following two years of functioning under that setup.

According to the Department of Finance (DOF),  FIRB has upheld its Resolution No, 19-21, which allows IT-BPM firms in economic zones to implement work-from-home (WFH) arrangements for 90 percent of their workforce only until March 31.

Finance Secretary Carlos Dominguez III explained that the work-from-home arrangement—allowed at the height of COVID-19 infection surges—had been "only a time-bound temporary measure". He added,

Given the increasing vaccination rate of Filipinos nationwide, we can now undertake safe measures for physical reporting of employees, including those working in the IT-BPM [information technology-business process management] firms operating within ecozones and freeports.

Dominguez also said that "the employees' return to the office would provide more opportunities and pave the way for the recovery of local micro, small, and medium enterprises (MSMEs) that depend on IT-BPM employees for their livelihood".

As part of further economic reopening to resume more productive activities, the government had encouraged on-site work under Alert Level 1 which would cover 62 percent of the economy.

The FIRB had warned of removing the tax-exempt incentives being enjoyed by BPOs that would not comply. The interagency asserted that the companies' registration with investment promotion agencies (IPAs) required occupancy of their physical locations.

What do you think of this move?

Sources: GMA, Inquirer