Nearshore Americas
Philippines BPO tax

Philippines Allows Tax Breaks for Remote Work, Bringing Relief to BPOs

BPO companies in the Philippines can now breathe a sigh of relief as the government in the Southeast Asian country has agreed to continue giving them tax breaks regardless of how many of their employees work off-site or on-site.

While the settlement relieved BPOs, the decision could leave real estate lobbyists outraged, as they are worried that the work-from-home arrangement would leave their office space market deserted in metro cities such as Manila.

Remote work was a rarity in the Philippines until the COVID-19 pandemic struck the country in mid-2020. A majority of the country’s 1.4 million BPO employees have worked remotely ever since.

The Philippine Economic Zone Authority (PEZA) suggested that BPOs call their employees back to the office, citing SEZ laws, which require them to have a large majority of their employees working on-site to become eligible for tax perks.

Under the new policy hammered out by the government, BPOs will have to register with the Board of Investments (BOI), whose rules don’t 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 recently.

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The new policy will likely benefit nearly 2,000 companies operating in the country, in addition to making it easy for foreign companies to recruit Filipino call center agents willing to work remotely.

Narayan Ammachchi

News Editor for Nearshore Americas, Narayan Ammachchi is a career journalist with a decade of experience in politics and international business. He works out of his base in the Indian Silicon City of Bangalore.

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