DOF: Concentrix gives up tax perks to continue WFH setup

THE Department of Finance (DOF) on Friday said outsourcing firm Concentrix has decided to give up its tax perks in exchange for a continued hybrid work setup for its employees.

“We support the decision of Concentrix to carry on with its flexible work arrangements. We respect that they are supportive of their employees who want such a work setup in this post-pandemic situation,” DOF Assistant Secretary Juvy Danofrata said in a statement.

“This goes to show,” she said, “that tax perks are not that important to investors doing business in the Philippines.”

She noted this validates the DOF’s policy thrust to avoid the grant of unnecessary tax incentives as this is apparently not the main consideration for them to do business in the country, especially for the business process outsourcing (BPO) firms that have been enjoying the exemptions and incentives for a long time.

Danofrata said, “By giving up their incentives, the opportunity cost to the government of these incentives will be minimized, which will make us more efficient in utilizing the government’s resources critical in our ongoing economic recovery efforts.”

Based on DOF’s assessment, total dividends declared by BPOs exceeded their income tax incentives, signaling that tax incentives are being used to augment shareholder returns.

This suggests that the tax benefits received by BPO firms are not that necessary as these only increase their profitability, she said.

Although advantageous to registered business enterprises, she said the grant of fiscal incentives from the government always comes with a responsibility.

Locators inside special economic zones (SEZs) are accorded tax incentives with the objectives of promoting the flow of investments into the areas where these SEZs are located, generating employment opportunities, and creating backward and forward linkages among industries in and around the economic zones.(CSL with PR)