Govt Strengthens Growing Business Process Outsourcing Companies Financial Support
Good news for the Business Process Outsourcing (BPO) companies in Fiji. To strengthen and grow the BPO companies, the Fijian Government announced positive incentives for BPO companies, potential BPO investors/startups in its 2021/2022 National Budget address past Friday.
In a statement the BPO Council of Fiji noted that the BPO industry has expanded significantly over the past decade and contributes approximately AU$ 66 million (FJ$101.51m) per annum to the economy, and this is expected to triple in the next three years.
The industry currently employs 5000 people and 90 per cent of the workforce is under the age of 35.
As Fiji delves into the diversification of its major industries, business process outsourcing provides a real and tangible alternative to Fiji’s traditional areas of focus, to contribute to the country’s economic growth.
With further investments and support, the industry is projected to create at least 15,000 more jobs and in the next five years, BPO companies can bring in approximately US$1.9 billion (FJ$3.95bn) in foreign reserves, the statement said.
Attorney-General and Minister for Economy Aiyaz Sayed-Khaiyum in his budget address highlighted the following incentives:
■13-year tax holiday and customs duty exemption is currently available for businesses engaged in software development, call centres, customer contact centres, engineering and design, research and development, animation and content creation, distance learning, market research, travel services, finance and accounting services, human resource services, compliance and provision of risk administration services.
■To further incentivise investments in the BPO sector, a 20-year
tax holiday will be provided to BPO operators.
To incentivise investment in buildings and other infrastructure development for the BPO sector, including costs incurred to meet the specific requirement of BPO operators, a new income tax incentive package will be offered to investors with the condition that 90 per cent of the income should be generated from BPO services.
Further to the above incentives the following Income tax exemption will be provided as follows:
■10 year tax holiday for investments ranging from $2 million to $5 million;
■15 year tax holiday for investments ranging from $5 million to $10 million; and
■20 year tax holiday for investments ranging above $10 million.
Ms Sagufta, Executive Director for the Business Process Outsourcing Council said: “We are extremely grateful for the support by the government.
“The incentives will boost investment in the sector and we will get closer to creating a diverse range of employment opportunities for the people of Fiji.
“Fiji is well placed for both outsourcing customers and investors since the major players, Philippines and India, have been greatly affected by the current Covid crisis and are facing some serious down times.
“Clients and investors are now looking for other potential outsourcing destinations and Fiji is well placed to tap into this demand.
“We have a thriving and resilient BPO industry, access to a talented young workforce and a strong service culture and now with the governments further support, we will be able to expedite the growth of our industry,” said Ms Sagufta.
BPO Grant
The Minister for Economy also announced a $200,00 grant for the BPO council to market Fiji as the premier outsourcing destination.
This grant will be used to increase awareness of Fiji’s BPO industry and attract potential clients and BPO investors.
Mr Sayed-Khaiyum said: “We have a workforce, we have the data accessibility, and we have the incentives in place to do extremely well in this industry.”
Vaccinated workforce
Ms Sagufta mentioned that 90 per cent of the BPO employees have received their first dose of the Vaccine and we are aiming for a 100 per cent fully vaccinated workforce by the end of October.
“We fully support the Government’s vaccination campaign for the safety of our employees and their families. Our clients and investors are now requesting for a fully vaccinated workforce as a pre-requisite and because Fiji has access to vaccines, it makes us look lucrative from an outsourcer and potential investor’s lens”, said Ms Sagufta.