Enterprises wishing to implement work-from-home and other hybrid work models may register with the Board of Investments (BOI) to continue enjoying their incentives.
In a television interview, Trade Secretary Ramon Lopez offered this option to registered business enterprises particularly information technology-business process management companies currently with the Philippine Economic Zone Authority (PEZA) which have been ordered to return to their ecozone locations effective April 1, 2022 to retain their incentives.
Lopez said the other option is to amend the PEZA law in the next Congress as the current mandate is
that the activities should be undertaken within the ecozones.
Lopez said while this is a limitation, “there’s room for a liberal application and implementation.”
“Lawyers from PEZA are working with the lawyers of the (Bureau of Internal Revenue) on how to at least adopt a liberal application something closer to the ratio of the definition of export orientation which is 70 percent… so they (enterprises) can apply the 70 percent (of their workers) as physical or on-site presence and the 30 percent, work-from-home.
Lopez said the alternative for some of these companies, especially those which are planning to expand, is to register with BOI where they can still avail of the same set of incentives and yet there will be no limitation as to their location or where they have to operate.
“There are no locational restrictions when you are registered with BOI, you can locate anywhere, even outside ecozones,” he added.
This policy, he said, is stipulated in the Corporate Recovery and Tax Incentives Act which rationalized and modernized incentives and reduced the corporate income tax rate.
Property consultancy JLL Philippines said PEZA has noticed a downward trend on applications and registrations of IT-BPM companies and that some are considering withdrawing their PEZA applications, and applying for incentives under BOI.
JLL Philippines did not provide details but attributed this to the fact some firms have yet to adopt hybrid work models. – Irma Isip
