The government has granted tax reprieve and other relief measures to registered business enterprises (RBEs) in economic zones to cushion the impact of the pandemic.
Charito Plaza, director-general of the Philippine Economic Zone Authority (PEZA) said the Bureau of Internal Revenue (BIR) has approved the agency’s move to consider as direct costs various expenses incurred by RBEs in relation to combat the new coronavirus disease 2019 (COVID-19) and therefore be entitled to the incentive of a 5-percent tax on gross income earned .
PEZA has also extended further until the end of the year the effectivity of Memorandum Circular no. 2020-011 “PEZA assistance to Ecozone IT Enterprises in Responding to COVID-19 that allows RBEs to implement work-from-home and other work arrangements outside PEZA-registered information technology centers.
The extension would facilitate the continued ease in movement of IT equipment and other assets .
The PEZA Board also approved on October 2 the extension of the effectivity of the 90 percent limit on the WFH arrangement until Sept. 12, 2021.
These extensions will particularly benefit IT-business process management companies.
Subject to BIR audit and applicable for quarantine period of enhanced community quarantine (ECQ), modified ECQ, and general community quarantine, the following are now considered direct costs and can be tax deductible: cost of temporary (near-site) housing/accommodations to employees of the enterprise, including accommodations inside the facility of the enterprise for stay-in employees; cost for shuttle services for the employees; port charges in MICP, Port of Manila, and NAIA arising from delays in the release of shipments at the said ports immediately after the implementation of the ECQ in NCR; costs for disinfecting conducted by the company to its work area/facility/premises, and cost of PPEs and sanitation requirements; and COVID tests for their employees. – I. Isip