IBPAP proposes P8bn annual subsidy for BPO sector

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The Information Technology and Business Process Association of the Philippines (IBPAP) has reportedly proposed an annual training subsidy of P8 billion from the government. The subsidy will be in exchange for the group’s support for the new wave of tax reform, dubbed TRAIN 2. The new tax reform law seeks to remove the tax benefits currently enjoyed by foreign investors, including those in the BPO industry, located in economic zones. Finance Undersecretary Karl Chua revealed that it was the officials of IBPAP who approached the DOF for a national skills upgrading program. Chua said IBPAP said the government needs to fund training and scholarships so they proposed P8 billion per year. However, the subsidy cannot be granted on top of the current menu of incentives that the industry enjoys. BPO locators currently pay only 5% gross income earned (GIE) tax, which companies registered under the Philippine Economic Zone Authority (Peza) pay in lieu of all taxes.

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