IBPAP seeks to pursue WFH arrangement

The IT Business Process Association of the Philippines (IBPAP) has again urged the Fiscal Incentives Review Board (FIRB) to reconsider its decision requiring industry employees to return to duty (RTO).

In a statement on Wednesday, Ibpap Chairman and CEO Jack Madrid said the FIRB’s 100% RTO directive for industry employees “poses a threat to the growth of the industry and remains a big challenge for industry players.”

“Additionally, a critical risk that industry players face is increased employee attrition if the WFH/hybrid work setup is not available. Therefore, even at the risk of being inflicted sanctions by the FIRB to businesses that are unable to comply with the RTO, some of these Registered Business Enterprises (RBEs) will choose to allow employees to continue working from home,” Madrid said.

The FIRB has temporarily allowed information technology and business process management (IT-BPM) companies to use telecommuting agreements without losing the incentives granted to them as ecozone locators. Arrangements were authorized until March 31.

RBEs in the IT-BPM sector have been allowed to adopt telecommuting agreements beyond the deadline, but must forfeit the tax incentives they currently enjoy.

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“IT-BPM RBEs’ decision to waive their tax benefits is a difficult interim measure to meet the needs of their employees and meet the demand of customers who prefer WFH/hybrid work arrangements. As such, the industry hopes that the FIRB will soon reconsider its decision and come out in favor of the IT-BPM industry by granting its players the privilege to fully implement PEZA Letters of Authorization (LoA) on WFH,” Madrid said, making reference to the Philippine Economic Zone Authority (PEZA).

The letters of agreement issued by PEZA allow IT-BPM companies to implement a 30% telework agreement until September 12, 2022.

“This has allowed companies to adapt to strong employee preferences and execute a smooth, phased return to onsite operations in the immediate term before a permanent telecommuting/hybrid work policy is established,” Madrid said.

He noted that the IT-BPM industry continues to be a major economic pillar of the Philippines, employing a total of 1.44 million people and generating $29.49 billion in service export revenue at the end of 2021.

Madrid noted that growth prospects for 2022 and the medium term are also optimistic provided favorable conditions are maintained.

“To retain and expand existing investments and encourage the influx of new investments, the country’s regulatory and investment policies must be clear and consistent. Consistency and clarity in the implementation of government regulations are key to defending our competitiveness at the national level,” Madrid said.

He noted that the terms and conditions of investment registrations must be honored and adhered to, including the granting of tax and non-tax incentives.

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