Senator Juan Edgardo “Sonny” Angara. INQUIRER.net / FILE PHOTO
Senator Juan Edgardo “Sonny” Angara reassured the business process outsourcing (BPO) sector that the tax incentives industry firms are receiving will not be taken out under the proposed comprehensive tax reform program
“Makakahinga na po nang maluwag ang ating BPO sector matapos liwanagin na hindi mawawala ang kanilang VAT exemption (The BPO sector can finally heave a sigh of relief after it has been clarified to its members that their VAT exemption will be untouched). With the industry’s incentives intact, we can continue to attract more BPO investments that would spur economic growth and job creation in the country,” Angara said in a statement on Thursday.
Some BPO firms earlier expressed concern over the effect of the Duterte administration’s tax reform program, which they feared would affect the attractiveness of the country to investors.
READ: Reduced tax perks to stifle BPO growth
The Department of Finance, however, clarified on Wednesday that foreign services of BPO companies in special economic zones will remain exempted from VAT and those outside special economic zones, including those registered under the Board of Investments, will retain their zero-rated status.
BACKSTORY: BPO firms’ perks to stay under tax reform package, says DOF
DOF Undersecretary Antonette Tionko said that there was no change in tax policy and some industry stakeholders have likely misinterpreted the provisions of the bill.
“BPO investments have been a big help in sustaining the country’s economic growth for the past years. We value such contribution and the government has been very supportive of the industry by granting BPO firms various incentives,” Angara said.
Angara, who is also the chairman of the ways and means committee, cited reports from the Information Technology and Business Process Association of the Philippines, claiming the BPO industry “provided direct employment to some 1.15 million Filipinos, and generated $23 billion in revenue.”
The senator also pointed out that the IT-BPO industry should be tapped as a key driver of rural development through the creation of high-value online jobs in far-flung communities. Airei Kim Guanga,INQUIRER.net trainee/IDL