Tax Incentive Not Relevant to BPOs and Foreign Investors

The Department of Finance (DOF) has stated that Concentrix, the Philippines’ biggest BPO firm has made the move to give up its tax breaks instead of maintaining the work-from-home arrangement of its agents. This trade-off between tax incentives and on-site arrangements could mean that tax breaks are no longer a top priority for foreign investors. 

DOF’s Assistant Finance Secretary Juvy Danofrata stated that “We support the decision of Concentrix to carry on with its flexible work arrangements. We respect that they are supportive of their employees who want such a work setup in this post-pandemic situation,” 

Currently, Assistant Secretary Danofrata is the head secretariat of the Fiscal Incentives Review Board (FIRB) which is tasked to supervise tax incentives to investors. 

He goes on to say that “this goes to show that tax perks are not that important to investors doing business in the Philippines. This validates the DOF’s policy thrust to avoid the grant of unnecessary tax incentives as this is apparently not the main consideration for them to do business in the country, especially for the BPO firms that have been enjoying the exemptions and incentives for a long time,” 

Assistant Secretary Danofrata mentions that “by giving up their incentives, the opportunity cost to the government of these incentives will be minimized, which will make us more efficient in utilizing the government’s resources critical in our ongoing economic recovery efforts,”

The BPO industry was only given until March 31, 2022, to continue its work-from-home operations by the FIRB. As of April 1, the Bureau of Internal Revenue (BIR) began checking if BPOs complied with the return-to-office order for those willing to keep their tax incentives. 

Source: Inquirer