Hundreds of BPOs could lose their tax incentives by year-end
MANILA, PHILIPPINES — More than two-thirds of Business Process Outsourcing (BPO) firms in the Philippines could lose their tax incentives by the end of 2022, said Philippine Economic Zone Authority (PEZA).
According to the agency, only 351 out of the 1,088 PEZA-registered firms had fully complied with the requirements to maintain their fiscal incentives as of December 12 — four days before the December 16 deadline.
PEZA OIC Deputy Director General for Operations Vivian Santos said, “We are actually asking the BOI if we could still receive applications [until] December 31, as indicated in the FIRB (Fiscal Incentives Review Board) [resolution]. But then, BOI would not extend [the period for] endorsement.”
“In order for PEZA to endorse on or before December 31, we need to also come up with a deadline,” she added.
Companies within the industry were permitted to transfer their registrations from PEZA to the Board of Investments (BOI) to continue implementing a work-from-home arrangement without limitations.
PEZA described the registration shift as a “paper transfer” and will retain some administrative functions over the registrants, including monitoring their compliance with the terms of their tax incentive agreements.
However, the paperwork to complete the transfer of registration is due by December 16 so PEZA could endorse it to BOI by December 31.
On November 17, PEZA endorsed 163 IT-BPO projects for BOI registration involving a total investment of P13.9 billion (US$249 million).
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