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PH BPOs: Tax Perks should be Retained

by: Sarah Joson

Tuesday, March 17, 2015 | Outsourcing News |

PH BPO Service Companies Requesting to Retain Tax Incentives

The Information Technology and Business Process Association of the Philippines (IBPAP) recently submitted a position paper on pending Senate Bills 35 and 987 under the Fiscal Incentives Rationalization (FIR) to Senator Juan Edgardo Angara, Senate Committee Chairman on Ways and Means, as well as Trade and Industry Secretary Gregory L. Domingo, seeking to retain tax incentives that are received by organizations in the services segment. These bills aim to remove the income tax holiday (ITH) and minimize the availability of the five-percent tax on gross income earned (GIE).

In the position paper, the association cautioned that should tax incentives be removed or changed, it could adversely affect the industry and economy because BPOs could move operations to Latin America and African countries where the cost of business is lower, better incentive packages are available, and the talent pool is similar with the Philippines.

IBPAP also pointed out that some BPOs which have established operations in the Philippines have expanded in neighboring countries such as Malaysia and China. Information Technology and Business Process Management (IT-BPM) companies are also said to be considering Latin America, Africa, and Costa Rica mainly because of the similarities of their fiscal incentives with the Philippines’.

IBPAP is the industry body that helps facilitate and protect the projects of IT-BPM, one of the country’s leading sectors. IBPAP has more than 300 member organizations and five firms representing 900,000 direct workers and an estimated 2.2 million indirect employees.


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