WFH for PEZA-registered IT-BPM firms extended until December 2022

Information Technology and Business Process Management (IT-BPM) firms registered with the Philippine Economic Zone Authority (PEZA) have been given until December 2022 to avail of hybrid work arrangements, a top official said Thursday.

According to Finance Undersecretary Antonette Tionko, the Fiscal Incentives Review Board (FIRB) met on Monday, September 14, and approved the extension of work-from-home arrangements given the extension of the Philippines’ state of calamity.

“What was agreed upon first by the FIRB was that the work-from-home arrangement, because of the extension of the declaration of state of calamity moved to December, it’s also moved to December,” she said during a Senate hearing.

President Ferdinand “Bongbong” Marcos Jr. earlier this week extended until December 31, 2022 the state of calamity across the country due to the COVID-19 pandemic.

Firms in economic zones enjoy fiscal incentives such as income tax holidays and a 5% tax on gross income earned.

However, the  Department of Finance earlier said IT-BPM firms should return to on-site duties following the loosening of lockdown restrictions, as those registered with PEZA should be operated within the geographical boundaries of the zone of freeport.

With the extension of the remote work arrangement, Tionko said firms registered with PEZA could simply shift their registration with the Board of Investments (BOI) and continue to enjoy the tax incentives.

“Between now and December, BPO companies that are registered with PEZA will be allowed to transfer their registration to BOI already. However, even if they transfer to BOI, they will be enjoying the same incentives under the CREATE,” TIonko said.

She was referring to the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Law, which was signed in March 2021 by then-President Rodrigo Duterte.

“They will simply continue the incentives they’ve been enjoying because right now, they’re under a transitory period because most of them were registered pre-CREATE,” she said.

The Information Technology and Business Process Association of the Philippines (IBPAP)  has long been pushing for a gradual transition from remote work to on-site arrangements. —KBK, GMA News