Senate leaves BPO perks intact in TRAIN

Noting that the BPO industry has been one of the country’s biggest job generators, the Senate left intact the Business Process Outsourcing (BPO) industry’s tax incentives to enable the Philippines to continue attracting more investments that would spur employment and economic growth.

Senator Juan Edgardo “Sonny” Angara made the statement yesterday after the IT-Business Process Association of the Philippines (IBPAP) expressed its gratefulness to the Senate for coming up with a version of the Tax Reform for Acceleration and Inclusion (TRAIN) retaining the current incentives of the BPO industry.

“Our policy should always be geared towards making doing business in the Philippines easier and easing unemployment in the country,” said Angara, chair of the Senate ways and means committee.

Angara noted that currently, new investment commitments under the IT-BPM industry slowed down due to various uncertainties with some investors delaying decisions to invest in the Philippines or deciding to invest elsewhere despite earlier plans to alter the current tax regime for investors.

But after the filing of Senate Bill 1592 or the Tax Reform for Acceleration and Inclusion (TRAIN) bill which retained the current incentives, IBPAP claimed investor perception on doing business in the country has been improving.

In a statement IBPAP, thanked the Senate for its continued support for the IT-BPM industry “especially in view of the headwinds and challenges that the industry is currently dealing with.”

“The efforts to take into account the potential impact of SB 1592’s VAT provisions on the industry's ability to generate employment certainly shows a full understanding of the sector's concerns,” IBPAP’s President and CEO Rey Untal reportedly said.

In 2016, the IT-BPM industry provided direct employment to some 1.15 million Filipinos, and generated $23billion in revenue. The Department of Labor and Employment (DOLE) also recently reported employment opportunities in the BPO industry remains at the leading spot in the top job vacancies available at the PhilJobNet.

“Our goal is to resolve the lack of employment in the country that’s why we made it a point to retain the tax incentives of this particular sector in order to generate more jobs and foster economic development,” he said.

Likewise, Angara said the Senate’s version of the TRAIN program chose to retain the zero VAT provisions for the Philippine Economic Zone Authority (PEZA) locators.

He said some 350 zones established under PEZA host over 3,500 investors who provide most of the export of goods and services of the country. These investors employ around two million Filipinos.

“These investors have selected the Philippines because of the quality of the Philippine workforce and incentives being granted by the government,” Angara emphasized.

The Senate TRAIN version ensured that the zero-rating would not be removed through the insertion of specific provisions relating to sales to entities registered with the ecozones and freeport zone authorities.

“Foreign investments are crucial in sustaining the country’s economic growth and in providing jobs for millions of Filipinos. We value such contribution that’s why the government has been very supportive of the industry by granting them various incentives. We will ensure that such incentives will remain intact,” the senator said.