The Philippine Economic Zone Authority (PEZA) is seeking the suspension of the 10-percent onsite capacity requirement for information technology-business process outsourcing (IT-BPO) companies implementing a work-from-home (WFH) arrangement.
In a statement, PEZA said its board had proposed to the Fiscal Incentives Review Board (FIRB) the approval of a policy that will allow its registered IT-BPO enterprises to operate WFH without that requirement until Sept. 12, 2022 and without diminution of fiscal incentives.
PEZA cited Rule 23, Section 3 (d) of the Implementing Rules and Regulations of Republic Act No. 11534 or the Corporate Recovery and Tax Incentives for Enterprises Act.
The rule, titled Temporary Measures for Exceptional Circumstances, provides that an investment promotion agency (IPA) may implement temporary measures to support the recovery of registered business enterprises from exceptional circumstances, upon prior approval of the FIRB. Exceptional circumstances include pandemic, epidemic, war, armed conflict, state of national health emergency, outbreak of diseases, international or regional financial crisis, major disaster such as volcanic eruption, earthquake and super typhoon, or analogous circumstances.
“The proposal of PEZA is merely temporary in consideration of the ongoing pandemic. We have yet to receive formal notice on the FIRB’s decision regarding our recommendation,” said Charito Plaza, PEZA director-general.
PEZA and the Board of Investments also suggest the amendment of Sec. 309 of the CREATE Law through the enactment into law of Senate Bill No. 2306 that increases the percentage of allowable WFH based on employment and not on revenue.
At present, the threshold is 50 percent based on revenue.
“We can have a more permanent solution to this, recognizing, based on McKinsey (and Company) report, that WFH is really part of the new normal post-pandemic (…) It’s one way we can enhance our competitiveness as an IT destination,” said Tereso Panga, PEZA deputy director-general.
