BPO group cites confusion over tax perk in TRAIN | Inquirer Business
Monday, August 20, 2018
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BPO group cites confusion over tax perk in TRAIN

A subsector of the business process outsourcing (BPO) industry has asked the government to keep a special tax rate for its employees, as it sought to clarify confusing provisions related to the Tax Reform for Acceleration and Inclusion (TRAIN) law.

The Philippine Association of Multinational Companies Regional Headquarters Inc. (Pamuri) is seeking clarity on the fate of employees’ 15-percent preferential tax rate (PTR) on gross income. These so-called elite workers of the BPO industry are employed by regional operating headquarters and regional headquarters (ROHQs/RHQs) that have been established by multinational companies.

“The ROHQ/RHQ industry… are surprised and, more importantly, overcome with confusion over the effect of the signed [TRAIN law] and the veto message that followed several days later,” the group told the Inquirer in an e-mailed statement.

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Under the TRAIN law, only ROHQs and RHQs existing prior to this year would be able to enjoy this tax perk. The incentive would no longer be afforded to new companies that would be investing here starting this year.

There are two citations in the TRAIN law that allowed the PTR. One allowed the special tax rate, while the other provided this would apply only to ROHQs and RHQs already existing before 2018.

The problem, according to Pamuri, is that President Duterte vetoed only a part of the latter provision. The question, therefore, is whether or not the first provision—the one which granted the special rate—still applies.

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TAGS: Business, Business process outsourcing (BPO), train
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