BPO industry lobbies for retention of tax incentives

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Photo taken on October 30, 2007 shows Filipino call center personnel attending to their US clients at a new business process outsourcing office in Manila. -- AFP

THE Information Technology-Business Process Association of the Philippines (IBPAP) said the industry’s growth has created significant employment and “transformed” the working environment, as it called for tax incentives its members enjoy to be retained in the Tax Reform for Acceleration and Inclusion (TRAIN) legislation.

In a statement Monday, IBPAP said that the retention of the incentives will not only keep buoy the sector — which directly employs 1.2 million, four million more indirectly — but also sustain “an attractive business environment” that will attract more investment.

“This has been proven over the past decade where transformation of cities throughout the country into IT parks and IT-BPM hubs have improved the quality of life for entire communities, allowing them to earn more, spend more and remain in the country to raise their families,” it said.

The first package of TRAIN legislation from the House and Senate is currently being reconciled by a bicameral committee.

IBPAP’s six-year road map projects industry revenue of $38.9 billion by 2022 from $25 billion in 2016, with an additional 1.8 million workers.

The Department of Finance (DoF)-backed TRAIN, which will come in four packages, is expected to reduce income tax to provide stronger purchasing power. At the same time, it seeks to raise government revenue by removing or rationalizing tax breaks given to various sectors, and by raising excise tax on automobiles and sugar-sweetened drinks, among others.

In a statement issued by the DoF, Canadian Chamber of Commerce of the Philippines President Julian Payne expressed his support for the TRAIN, which he said will make the country as competitive as its Southeast Asian neighbors and attract more foreign investors.

“We definitely support the fact that [TRAIN] will maintain a responsible fiscal framework that will include funding for the public sector, for fiscal and social infrastructure, which will benefit the poor as well,” he added.

Finance Secretary Carlos G. Dominguez III in the same statement said that he expects the final version of the first TRAIN package to be signed by President Rodrigo R. Duterte by Dec. 15. — Anna Gabriela A. Mogato