MANILA, Philippines — The Fiscal Incentives Review Board extended the deadline for Information Technology and Business Process Management (IT-BPM) companies to transfer to the Board of Investments so they can continue implementing work-from-home set-up for employees.
The Department of Finance said in a statement on Thursday that the deadline was moved to January 31.
The FIRB noted that 60% or 640 registered business enterprises have not submitted their requirements to complete the transfer.
For context, the IT-BPM sector dealt with pandemic disruptions by shifting to work-from-home arrangements. Stakeholders wanted this scheme kept in place.
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But the previous Duterte administration initially threatened they would lose their tax incentives if they did not return to the office. After much hand-wringing, the national government relented and granted their request in September 2022.
The IT-BPM sector houses business-process-outsourcing companies, oft considered one of the best revenue generators in the country. The government regularly monitors BPO earnings.
The Bangko Sentral ng Pilipinas forecasts BPO earnings in 2022 to grow 9% year-on-year, slightly lower compared to the 9.4% annual uptick recorded in 2021. In 2023, annual growth of BPO earnings is projected to slow to 5%.
That said, the FIRB penned a resolution last year which allowed registered IT-BPM enterprises that wanted to adopt remote work as their standard, to transfer to the BOI. This meant that these companies will not lose their incentives, or violate tax laws.
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