Foreign business process outsourcing (BPO) companies are putting their expansion plans on hold amid uncertainties surrounding the government’s second tax reform bill. The reform bill seeks to reduce corporate income taxes and rationalize fiscal incentives. Contact Center Association of the Philippines (CCAP) president Jojo Uligan said this resulted in a decrease of the BPO sector’s growth rate. In the short term, the industry had earlier expected a growth rate at 9%, lower than the 15% to 16% in previous years. In Tholon’s Global Services Index 2018 for top outsourcing destinations the Philippines was ranked second after India. In 2017, the Philippines placed third. The industry said the proposed reduction of tax perks offered in economic zones where BPO firms are located will be detrimental to the sector. Uligan said the government should consider the timing of the proposal in view of the industry’s growth.
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