Once Again, Philippines BPOs Face Risk of Losing Tax Benefits

Although the dispute over remote work has been settled, hundreds of BPO firms in the Philippines are still at risk of losing tax incentives.

Under the deal agreed with the government, BPO companies must register with the Board of Investments (BOI) by the end of 2022. As of December 15, only 786 companies had submitted their papers, according to the BOI.

Those who miss the deadline will lose tax benefits, reported local news outlet Business Inquirer. It’s not clear how many of these companies are BPOs.

The Philippines Economic Zone Authority (PEZA), the agency that regulates business operations in the country’s free zone, expected to transfer nearly 1,100 applications to the BOI by the end of December 15.

As the COVID-19 pandemic wreaked havoc in early 2020, most BPO employees in the Philippines began working from home. But earlier this year, PEZA insisted that BPOs should call their staff back to the office, stating SEZ laws dictate they must have most staff on site.

After several weeks of negotiations, the government agreed to switch their registrations to BOI, whose rules do not bother about remote working arrangements.

“So, the problem is solved. The tax incentives will continue, [and] they [BPOs] can opt to do it from home,” Benjamin Diokno, finance secretary, told Congress in September.

Known as an “American call center’, the Philippines’ BPO industry employs more than 1.3 million people and is regarded as the major source of dollars for the impoverished country.