BPOs to lose tax privileges

Call center jobs growing in the Philippines / Wikipedia Photo

Many sectors had expressed their opposition to the tax reform package raised by the Duterte Administration where it aims to cut personal income tax and increase Value Added Tax (VAT) on certain commodities.

The Information Technology and Business Process Association of the Philippines (IBPAP) filed a petition requesting the administration to let them retain their fiscal incentives. According to a position paper obtained by the Inquirer, the IBPAP said that the proposed changes on the first package “will materially affect the positive perception of the Philippine business environment and will impact, in an irreversible way, the decision to remain, expand or set up new companies in the country.”

For Trade and Industry Secretary Ramon M. Lopez, the industry will not be in a losing end with the new tax reform and that he will not be in support of the IBPAP’s petition and even if the industry were to lose its tax privileges, the industry will still thrive.

Lopez also raised that the majority of companies under the industry will still have other privileges such as the income tax holiday of four to six years particularly those who are registered under the Philippine Economic Zone Authority (PEZA).

While the new tax reform package is currently scheduled for the plenary debates at the senate, there is a substitute bill that provides a provision wherein the exemption would be lifted when a new refund system has been incorporated that would give the actual refund or reject such payment within 90 days.