Give BPOs flexibility to choose own IPA, says industry group

Firms belonging to the information technology and business process management (IT-BPM) industry must be given the authority to register with the investment promotion agency (IPA) of their choice for ease of doing business, the IT and Business Process Association of the Philippines (IBPAP) said.

In statement on Wednesday, the industry group said it was crucial for investors and locators to have “clear and consistent legislation that will ensure minimal disruptions to their business operations.”

House Committee on Ways and Means Chair Joey Salceda earlier suggested to transfer IT-BPM companies under the supervision of the Board of Investments (BOI) from the Philippine Economic Zone Authority (Peza) to be able to access “more flexible” enhanced deductions system under the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act.

“If mass transfer of registration from one IPA to another is mandated, registered business enterprises (RBEs) will be subjected to an arduous task that not everybody may be willing to take for the time being and under the present circumstances,” IBPAP president and CEO Jack Madrid said.

“This appears contrary to the ease of doing business principles that the government has been trying so hard to establish,” he added.

Aside from BOI and Peza, the other IPAs are: Subic Bay Metropolitan Authority, Cagayan Economic Zone Authority, Aurora Pacific Economic Zone and Freeport Authority and Tourism Infrastructure and Enterprise Zone Authority.

In a separate statement on Wednesday, Peza Director General Charito Plaza said Salceda’s proposal was “misleading.”

“Under the CREATE Law, all IPAs now have the same incentives to offer to investors and locators both as exporters or domestic-market RBEs,” she explained.

Since IT-BPM firms are considered export enterprises, CREATE grants them an income tax holiday of four to seven years, followed by special corporate income tax or enhanced deductions for 10 years.

Plaza also echoed IBPAP’s statement, saying the RBEs must be given the “freedom to choose which IPA investors would want to register [with].”

Last year, IBPAP said industry revenues were up nearly 11 percent to $29.49 billion while the number of full-time employees rose by 9.1 percent to 1.44 million.