THE American Chamber of Commerce of the Philippines, Inc. (AmCham) said the new tax incentives legislation offers companies registered with the Philippine Economic Zone Authority (PEZA) more options to resort to 100% work from home (WFH) arrangements.
AmCham Executive Director Ebb Hinchliffe last week said that the House of Representatives — approved bill, which will amend Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act, checked many of the boxes on the US companies’ wish lists.
“It’s got most of the provisions we wanted — to help improve the work from home situation and to improve the elimination of red tape are some of it,” said Mr. Hinchliffe.
The CREATE MORE (CREATE to Maximize Opportunities for Reinvigorating the Economy) bill was approved at the House on Nov. 21.
The bill allows registered business enterprises in the information technology-business process outsourcing (IT-BPO) industry to be eligible for incentives even if they conduct business under alternative work arrangements, as long as they are compliant with the on-site requirements set by the investment promotion agencies (IPAs), such as PEZA.
PEZA currently proposes a 70% on-site and 30% WFH business model for its locators, who would remain eligible for incentives.
“This is livable, but it’s not preferable for most. I mean, for manufacturing, they don’t need it at all. But for the IT-BPO industry it is critical,” Mr. Hinchliffe said.
“Companies have a decision to make. One certain company, that I can’t name, is in the midst of hiring about 6,000-7,000 employees, but they don’t want to be with the Board of Investments (BoI), they want to be with PEZA and they can’t do it because of the WFH arrangement,” he said.
The WFH workaround the government arrived at last year was to transfer PEZA companies to the BoI, which is less concerned with whether companies need to be located in economic zones.
Mr. Hinchcliffe added that employees nowadays don’t want to come to the office now that they know that they have the WFH option.
Asked why companies prefer PEZA, he said: “PEZA does a very good job of working at the local government unit level, while BoI does an excellent job at a national level. But PEZA is very responsive.”
“Both of them are really okay, it just depends if you’re looking for the local market, then BoI is really good, if you’re looking for export, PEZA really good,” he added.
Asked to comment, PEZA Director General Tereso O. Panga said it wants to acquire the power to set its own WFH rules.
“What we really aspire to is for the Fiscal Incentives Review Board (FIRB) to give policy-making powers to the investment promotion agencies (IPAs) so we can formulate our own guidelines on WFH that are responsive to the needs of the IT sector,” he said.
He said that some IPAs are even proposing 100% on-site work for RBEs and their workers to be eligible for incentives.
“But we will defer to the legislators’ position on WFH setup under the CREATE MORE,” he said. — Justine Irish D. Tabile