The deadline for the transfer of existing registered business enterprises (RBEs) in the information technology and business process management (IT-BPM) sector to the Board of Investments (BOI) has been extended until January 31, the Fiscal Incentives Review Board (FIRB) said.
In a statement sent by the Department of Finance (DOF) yesterday, the inter-agency board cited in FIRB Resolution No. 033-22 the need to extend the initial deadline set for Dec. 31, 2022, as only about 40 percent of the affected RBEs have successfully submitted the requirements on time.
Around 640 RBEs have yet to submit their requirements for the transfer.
Benjamin Diokno, DOF secretary and FIRB chairperson, reaffirmed the FIRB’s continued support for IT-BPM enterprises by recognizing the need to adopt flexible work arrangements without adverse effects on the tax incentives they receive.
“We fully support our stakeholders in the IT-BPM sector and grant their request for more time to complete their transfer to the BOI,” Diokno said.
“The FIRB is committed to providing any form of assistance to effectively and expeditiously carry out the transfer of the concerned IT-BPM enterprises,” he added.
Tereso Panga, officer-in-charge of Philippine Economic Zone Authority (PEZA), said they agreed with the FIRB extension to give way to last-minute filing of applications for paper transfer by the RBEs.
“Whatever it takes to keep the competitiveness of our IT locators, we are all for it. As our IT locators expect a seamless paper transfer to the BOI, we hope that all ease of doing business measures under the existing PEZA one stop facility will be retained,” Panga said.
“If the national state of calamity will be extended, we also hope that the rules can be relaxed to allow IT locators to avail of the same work-from-home (WFH) privileges so they need not transfer to the BOI. Hybrid workplace is the preferred arrangement by our IT locators. Moving forward, we pray for the institutionalization of WFH, where both BOI and PEZA RBEs will be put on an equal footing following the objectives of the Corporate Recovery and Tax Incentives for Enterprises (CREATE) law and the Telecommuting Act,” he added.
On Sept. 14, 2022, the FIRB resolved the long-standing WFH issue of the IT-BPM sector by accepting the WFH arrangement as the new business model of most RBEs.
The resolution allows RBEs that have completed their registration transfer with the BOI to adopt 100 percent WFH arrangement without losing incentives , and without violating Section 309 of the National Internal Revenue Code of 1997 as amended by the CREATE Act.
In a separate statement, the DOF said the FIRB is finalizing the guidelines on the suspension or withdrawal of tax incentives, and the cancellation of project or activity registration applicable to all RBEs.
The guidelines are meant to provide uniform rules for imposing penalties on non-compliant RBEs. FIRB’s power to suspend or withdraw tax incentives, or cancel business registration was granted under the CREATE Act.
A public consultation by the end of January will be conducted once the guidelines have been approved by the FIRB-Technical Committee.
The guidelines will clarify the procedure for RBEs when responding to a show- cause order issued by their respective investment promotion agencies or the FIRB, or when filing an appeal from an adverse finding. – Angela Celis
