The Philippine Economic Zone Authority (PEZA) is in discussions with the Bureau of Internal Revenue (BIR) on the full entitlement of incentives of registered business enterprises (RBEs) implementing up to 30 percent offsite work.
PEZA deputy director-general Tereso Panga said the agency is pushing for incentives if locators are able to comply with the minimum 70 percent export threshold and minimum 70 percent workers onsite under a recently-approved PEZA board resolution allowing hybrid work until September 2022.
But he said those found to exceed the caps will face penalty. He did not elaborate.
Panga said allowing hybrid work is a resumption of an existing policy that the PEZA voard approved before the Corporate Recovery and Tax Incentives for Enterprises (CREATE), which means this policy is covered by the sunset provision of that law.
Under CREATE, export enterprises registered with ecozones and freeports are entitled to incentives until the sunset period ends.
If the RBE is granted an income tax holiday (ITH), the sunset period will run until the ITH expires. If the existing RBE is granted the tax rate of 5 percent on gross income , whether solely or after the expiration of the ITH, the sunset period is set for 10 years from the effectivity date of CREATE.
CREATE was signed into law in March 2021.
With the BR, RBEs including information technology-business process management (IT-BPM) companies that cannot immediately return to office (RTO) even after April 1 can request a Letter of Authority (LOA) from PEZA with the needed requirements.
PEZA said 400 companies have sought for LOA.
The hybrid work setup is until Sept. 12, 2022 only, the declared end of state of (COVID-19) calamity by President Duterte.
“PEZA’s work from home scheme for its registered IT-BPMs and RBEs has been conceptualized even before the passage of Republic Act No. 11165 also known as the Telecommuting Act in 20 December 2018. PEZA therefore is just restoring the regular ratio of not more than 30 percent domestic sales allowance and WFH work ratio,” said Charito Plaza, PEZA director-general in a statement.
As of 2021, PEZA had 1,274 IT locator companies operating in 297 IT centers/parks and providing over a million jobs nationwide with exports of $15.797 billion. – Irma Isip
