The Fiscal Incentives Review Board (FIRB) rejected the Philippine Economic Zone Authority’s (PEZA) petition to extend work-from-home (WFH) arrangements for registered information technology-business process management (IT-BPM) firms at a time where diesel prices continue to surge.
The Department of Finance (DOF) announced on Wednesday (March 9) that the FIRB stood by its Resolution No. 19-21, which only allowed WFH arrangements for 90% of workers in IT-BPM firms in economic zones (ecozones) until March 31, 2022.
Early in February, the PEZA had proposed for IT-BPM firms in ecozones to have extended WFH arrangements until September 12 this year.
They cited Rule 23, Section 3 (d) of the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act, which provides that an investment promotion agency may implement temporary measures to support the recovery of registered business enterprises from exceptional circumstances, upon prior approval of the FIRB.
Nevertheless, the FIRB decided to reject the PEZA’s proposal during its meeting last February 21, despite the CREATE Act’s inclusion of pandemic, state of national health emergency, outbreak of diseases, and international or regional financial crisis among the list of “exceptional circumstances” in its rules.
According to Finance Secretary and FIRB chairman Carlos Dominguez III, “The WFH arrangement is only a time-bound temporary measure adopted during the surge of the COVID-19 pandemic. Given the increasing vaccination rate of Filipinos nationwide, we can now undertake safe measures for physical reporting of employees, including those working in the IT-BPM firms operating within ecozones and freeports.”
Dominguez adds that returning on-site would “pave the way for the recovery of local micro, small, and medium enterprises (MSMEs) that depend on IT-BPM employees for their livelihood.”
PEZA Director General Charito B. Plaza, however, said in a text message that they will ask the FIRB to review its decision: “We’ll ask for a reconsideration especially that (the) cost of oil and goods are high. The pandemic is not yet over and large amounts were invested in equipment for WFH arrangements, like laptops.”
If the FIRB continues to reject the PEZA’s proposal, IT-BPM firms in ecozones who do not comply with their decision will lose tax-related benefits.
Antonio Gabriel D. Tongco is a writer and communication major who also likes to explore other facets of writing such as research and SEO. The views expressed are his own.
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