Senate seeks to retain perks for tech, BPO firms

The Senate version of the administration’s first tax reform package seeks to keep the value-added tax (VAT) exemptions enjoyed by the IT-BPM industry.

Filed as Senate Bill (SB) 1592 late last month, the bill will keep the zero-VAT status on the sale of goods and services, a move which means that the IT—Business Process Management industry will be able to keep the perks that were said to have played a crucial part in keeping the industry competitive against rival markets.

Rey Untal, president of the IT & Business Process Association of the Philippines (IBPAP), told the Inquirer in a recent interview that the Senate’s version kept the current zero-rate status, but noted that there is still a “concern” over the version passed by the House of Representatives last May.

The lower house passed HB 5636, its version of the first tax reform package that will lower personal income taxes while expanding consumption taxes, including broadening the VAT base.

In a paper, IBPAP said proposed changes under the package “will materially affect the positive perception of the Philippine business environment and will impact decisions to remain, expand or set up new companies in the country.”