MANILA, Philippines – The Information Technology and Business Process Association of the Philippines (IBPAP) has reaffirmed that member companies are permitted to implement Work from Home (WFH) for up to 30% of their workforce based on an agreement with the Philippine Economic Zone. Authority (PEZA).
The industry released a statement after the Bureau of Internal Revenue (BIR) formed a task force to monitor IT-process management (IT-BPM) companies’ compliance with the back-to-work order.
IBPAP President and CEO Jack Madrid said the industry stands by the validity of letters of authorization (LOAs) issued by PEZA to member companies as well as those of six partner organizations.
Madrid said the LOAs allowing 30% WFH arrangement is a legal and fair measure that PEZA-registered IT-BPMs are grateful for.
“The LOA provides the relief needed to deal with the cost and competitiveness pressures that the IT-BPM industry has been experiencing since the start of the pandemic,” Madrid said.
With LOAs, IT-BPM companies also benefit from greater flexibility when transitioning and setting up their offices for returning employees.
The IBPAP statement comes as the BIR announced the creation of a working group to verify whether IT-BPM companies operate in the economic zones where they are assigned and registered.
BIR Deputy Commissioner Arnel Guballa said eye inspections would determine whether IT-BPM locators meet the conditions for granting their tax incentives under the Business Recovery and Business Tax Incentives Act. (CREATE).
The Fiscal Incentives Review Board (FIRB) has authorized IT-BPM companies to implement the WFH arrangement for up to 90% of the workforce without any effect on their incentives until March 31 this year , in the midst of the pandemic.
IT-BPM companies located in ecozones must operate there to take advantage of their tax advantages.
IT-BPM companies with LOAs of PEZA can implement 30% WFH until September 12 of this year or the end of the declaration of calamity status.
Madrid said the expiration of the 90% WFH deal has posed great challenges for many IT-BPM companies.
This includes mobilizing employees and equipment for on-site operations, while managing employee satisfaction and mitigating widespread attrition, as many of their workers prefer working from home (WFH).
“Over the past two years, the IT-BPM industry has successfully weathered the pandemic, recording revenue and job growth thanks to support from PEZA, FIRB and other government partners. We continue to count on their support to maintain the validity of the LOAs in order to achieve our employment and revenue objectives,” Madrid said.