THE Board of Investments (BoI) has received 163 endorsements of information technology and business process management (IT-BPM) projects seeking to transfer their registration from the Philippine Economic Zone Authority (PEZA), according to the Department of Trade and Industry (DTI).
The DTI said the BoI tally is as of Nov. 17, of which 55 have paid the administrative fees and are being processed. The transfer of registration allows the IT-BPMs to offer 100% work-from-home (WFH) arrangements while still enjoying fiscal incentives under Republic Act No. 11534 or the Corporate Recovery and Tax Incentives for Enterprises (CREATE) law.
“As of Nov. 17, 2022, the PEZA has endorsed for registration with BoI 163 projects under the IT-BPM sector with a total investment of P13.9 billion,” the DTI said in a statement.
On Oct. 18, the DTI issued Memorandum Circular No. 22-19 that provided the specific procedures on the transfer of registration from the PEZA to the BoI.
The DTI issued the circular after the inter-agency Fiscal Incentives Review Board issued Resolution No. 026-22 on Sept. 14 which permitted registered IT-BPMs to implement a 100% WFH arrangement and remain eligible for fiscal incentives such as income tax holiday by transferring their registration from PEZA to BoI.
Registered IT-BPMs have until Dec. 31 this year to shift their registration to the BoI from the PEZA.
“Those who did not exercise the option shall no longer be allowed to register and shall be covered by Corporate Recovery and Tax Incentives for Enterprises (CREATE),” the DTI said.
Under Republic Act No. 11534 or the CREATE Act, registered business enterprises (RBEs), including IT-BPM firms, are required to conduct operations within economic zones in order to be eligible for fiscal incentives.
According to the DTI, registered IT-BPMs that can transfer to the BoI are those that have remaining tax incentives under CREATE and those that have approved incentives on or before Sept. 14 under the CREATE Act.
“After the lapse of the period of the remaining tax incentives, the existing registered project of the covered RBEs shall not be entitled to additional incentives, unless the activity qualifies as a new investment or qualified expansion under the Strategic Investment Priority Plan (SIPP), subject to a separate application for registration,” the BoI said.
IT and Business Process Association of the Philippines (IBPAP) Chief Policy and Regulatory Affairs Officer Celeste B. Ilagan said in a Laging Handa briefing on Wednesday that further skills development is required for the industry’s workers.
“Many of our services are already at higher value. The skills are increasing. The digital transformation is a big part of globalization and therefore, employees need to be digitally skilled,” Ms. llagan said.
“It would be good for the industry if the Department of Education and Commission on Higher Education (equip graduates with) the skills that they need to be hired,” she added.
IBPAP estimates that the IT-BPM industry employed 1.44 million full-time workers and posted 10.6% revenue growth in 2021. — Revin Mikhael D. Ochave