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Extension of the work-from-home arrangement for the information technology and business processing management sector is still up for discussion, according to the Fiscal Incentives Review Board
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Philippine Economic Zone Authority OIC and deputy director general Tereso Panga earlier said the extension of the 30% WFH setup until March 2023 had been “approved in principle”
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Finance Assistant Secretary and FIRB Secretariat head Juvy Danofrata says extending the WFH arrangement beyond September 12 would need FIRB approval through a resolution
The Fiscal Incentives Review Board (FIRB) said the extension of the work-from-home (WFH) arrangement for the information technology and business processing management (IT-BPM) sector is still up for discussion.
In a position paper submitted to Finance Secretary and FIRB Chairperson Benjamin Diokno, the FIRB Secretariat said the Philippine Economic Zone Authority’s (PEZA) decision to extend the IT-BPM enterprises’ WFH arrangement until March 2023 lacks legal basis.
“To date, the current and effective resolution issued by the FIRB states that the WFH arrangement for the IT-BPM companies within the ecozones is only until September 12, 2022,” said Finance Assistant Secretary and FIRB Secretariat head Juvy Danofrata.
Several news reports recently quoted PEZA officer-in-charge and deputy director general Tereso Panga as saying the PEZA Board deferred during a meeting on August 26 approval of the extension of the 30% limit on the WFH setup until March 2023 but agreed to subject it to a referendum once the agency receives further clarification from the Department of Finance (DOF) and Board of Investments (BOI).
Panga also said the extension has been “approved in principle” and that PEZA expects FIRB to issue a supporting resolution to allow extension of the 30% WFH limit until March 2023 to benefit registered business enterprises (RBEs) covered by the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act.
The PEZA Board includes officials from FIRB member agencies such as the DOF, Department of Trade and Industry, and National Economic and Development Authority.
Danofrata pointed out that neither the CREATE Act nor the previous FIRB resolution gives any of the investment promotion agencies (IPAs), such as PEZA, the power to unilaterally allow the adoption of WFH arrangements.
She said any move to extend the WFH arrangement beyond September 12 would need approval of the FIRB through a resolution.
She added that the resolution should be anchored on the extension of the state of calamity or a declaration of the President of an exceptional circumstance, with Rule 23 of the CREATE Act IRR prevailing as its legal basis. The state of calamity under Proclamation No. 1281 will expire on September 12, but is already being considered for extension.
According to Danofrata, the FIRB Secretariat is already coordinating with BOI in studying options to allow the WFH arrangements for PEZA’s locators in the IT-BPM sector.
She added that the matter will be deliberated in the FIRB’s next meeting in mid-September.
The FIRB issued on June 21 Resolution No. 017-22, which temporarily allowed registered IT-BPM firms to have a 70% on-site and 30% WFH arrangement from April 1 to September 12 without adversely affecting their fiscal incentives under CREATE Act.
Under Section 309 of the National Internal Revenue Code (NIRC) of 1997, as amended by CREATE Act, RBEs and/or registered activities must be conducted within the geographical boundaries of the ecozone or freeport where they are located to be entitled to fiscal incentives.
PEZA and the IT & Business Process Association of the Philippines have earlier requested FIRB to allow the implementation of a hybrid work scheme due to concerns of investors and workers amid the ongoing pandemic until December 2022.
Meanwhile, PEZA has issued Letters of Authority to registered IT-BPO companies and RBEs that want to implement a hybrid work arrangement, or a 30% WFH scheme, until September 2022.
PEZA said the 30% WFH arrangement is permissible under PEZA, CREATE and Telecommuting laws. – Roumina Pablo
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