The Department of Trade and Industry (DTI) will propose to the Fiscal Incentives Review Board (FIRB) the passage of a resolution that would allow registered business enterprises (RBEs) to tap work-from-home or offsite operations as a long-term arrangement while still being entitled to incentives.
The DTI is citing Rule 23 of the recently-issued implementing rules and regulations (IRR) of the Corporate Recovery and Tax Incentives for Enterprises which provides among others that exceptional circumstances including pandemic allow for the suspension of export requirements to RBEs, deferment of the income tax incentive availment, movement of the start of commercial operations and adoption of any other measures subject to FIRB approval.
The IRR provides affected RBEs incentives or period of availment shall be maintained.
The DTI’s proposal is in response to a call made by RBEs, particularly those belonging to the Information Technology Businessing Association of the Philippines (IBPAP) to find a permanent solution to WFH or similar arrangements as the country continues to grapple with the new coronavirus disease 2019 pandemic.
IBPAP members are mostly registered with the Philippine Economic Zone Authority (PEZA).
PEZA has allowed IT-business process management (IT-BPM) companies to implement WFH and other flexible offsite arrangements of up to 90 percent only until September this year.
IT-BPM RBEs are supposed to do the work in PEZA-located areas where we get they get their incentives from.
The DTI said government restrictions and health protocols when applied onsite are an additional cost to IT-BPM companies and tend to limit their operations.
The DTI said it is coordinating with the committee of the Department of Finance on the plan to get the approval of FIRB beyond the September 12 effectivity of the PEZA directive.
However, the DTI is not certain if it could the FIRB agree to the 90 percent cap.
The DTI is also in discussions with IBPAP on the impact of flexible working arrangements.
Benedict Hernandez, IBPAP chairman, in forum last week said members achieved 95 percent productivity even if 70 percent of their workers were working from home.
The DTI said it also might be able to remove the locational restriction in the National Capital region for registering IT-BPMs if and when there are available spaces left off by those which have moved out of these locations.
