Up to 85% of tax perks given to BPOs unnecessary – DOF

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The Department of Finance has said that 59-85% of tax incentives given to voice-based business process outsourcing (BPO) firms were unnecessary in its cost-benefit analysis of fiscal incentives. However, for non-voice BPO, only 11-15% of incentives were considered unnecessary. Finance Undersecretary Karl Kendrick T. Chua said that for every P1.00 in tax perks given away by the government, between P0.60 and P1.15 come back in benefits to the economy. Chua said the analysis showed that, on average, there is no difference between the performance of firms receiving incentives and those paying the regular corporate income tax (CIT) rate in terms of employment, exports, investments and productivity. According to the DOF, the government missed out on around P301 billion in revenues in 2015 as a result of tax incentives and other perks granted to only 2,844 firms.

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