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The Philippine Economic Zone Authority urged IT-business process outsourcing companies to comply with the return-to-office order of the Fiscal Incentives Review Board beginning April 1
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The ecozone authority says it will abide by FIRB’s decision on a 100% onsite work for IT-BPOs by April while citing “a need to review and establish the legal framework for implementing a hybrid work model”
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PEZA says it hopes to follow India and other countries’ practice of providing a specific ratio of WFH and on-site work arrangements
The Philippine Economic Zone Authority has urged registered information technology-business process outsourcing (IT-BPO) companies to follow the return-to-office (RTO) order of the Fiscal Incentives Review Board (FIRB) beginning April 1.
PEZA said this is in view of applicable regulations in the definition of export enterprises located in economic zones.
“The allowance of the 90:10 WFH (work-from-home) set-up was just a temporary measure during the pandemic. Now that we’re reopening the economy, we’re going back to the regular ratio required of registered business enterprises inside the ecozones,” PEZA director general Charito Plaza said in a statement.
FIRB in August last year issued Resolution No. 19-21, which allowed registered IT-business process management (IT-BPM) enterprises to implement until March 31 this year WFH arrangements without jeopardizing their fiscal incentives under Republic Act No. 11534, or the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act.
FIRB in February denied requests by IT-BPMs to extend the WFH arrangement under Resolution 19-21, citing such arrangement is a time-bound temporary measure adopted during the surge of the COVID-19 pandemic and the RTO order is necessary to help the economy bounce back.
READ: FIRB rejects WFH extension for IT-BPM sector
“We are supportive of the proposal of the IT & Business Process Association of the Philippines (IBPAP) to implement a hybrid work scheme for the IT-BPO sector, and we hear the concerns of our investors and their individual workers affected by this order; however, we need to follow the regulations as mandated by the law,” Plaza noted.
IBPAP earlier suggested a hybrid WFH arrangement from April to December 2022 given the “overwhelming preference [of IT-BPM employees] for a balanced, hybrid work arrangement.”
Plaza said PEZA will abide by FIRB’s decision for a 100% onsite work for IT-BPOs by April “while there is a need to review and establish the legal framework for implementing a hybrid work model.”
PEZA also noted that Republic Act No. 7916, or the Special Economic Zones Act of 1995, requires that all registered companies operate within ecozones in order to enjoy tax incentives.
“At present, PEZA cannot change the ratio unless the laws will be amended to incorporate the adaptation of hybrid schemes. In the future, we hope to follow the practice of India and other countries and provide specific ratios for WFH and onsite work arrangements,” Plaza said.
She said PEZA supports the hybrid work scheme “as it’s been proven effective in the last [two] years of the pandemic.”
“What we can do is to recommend this for the next administration to address. As of now, we have to abide by the existing laws and the decision of the FIRB and help to put back the economy to normal,” she added.
With this, Plaza reiterated PEZA’s appeal to its locators to adhere to FIRB’s decision to avoid any penalties as provided under the law.
Section 2, Rule 22 of the CREATE Law’s Implementing Rules and Regulations provides that any violation of the provisions of the act, including other related revenue regulations, orders or issuances of the government, will result in revocation or suspension of the incentives or business closure of registered business enterprises.
