Business process outsourcing (BPO) companies can continue to work from home (WFH) until further notice.

This after the provisional green light allowing outsourcing companies to continue with the "work from home" arrangement, which is set to expire on Sept. 12, was extended until a final resolution is found, according to Finance Secretary Benjamin Diokno.

Diokno, who is also chair of the Fiscal Incentives Review Board (FIRB), said in a statement BPO firms need to continue with the WFH arrangement until the FIRB conclusively decides on the Philippine Economic Zone Authority's (Peza) request to extend the WFH setup.

"Considering the Sept. 12, 2022, expiration of the resolution, it is just fair that we extend the WFH arrangement for IT-BPM (information technology and business process management) companies until we finalize a resolution addressing the issue," Diokno said.

Indefinite extension

He was referring to FIRB Resolution No. 017-22, which allows BPO firms to require 70 percent of their workforce to work in company premises while the rest are not. Diokno has issued a memorandum stating extension until further notice.

Diokno said the indefinite extension will stand until the FIRB conclusively decides on Peza's request to extend the WFH setup.

Finance Undersecretary Antonette Tionko said the matter will be discussed in the next FIRB meeting on Sept. 15.

"Given the longstanding issue on the WFH extension for the IT-BPM sector, we hope the decision of the [FIRB] will finally bring clarity to the matter," said Tionko, who also sits as chair of the FIRB Technical Committee.

"We listen to our stakeholders and see the WFH arrangement to be the new business model of most of the registered business enterprises," Tionko said.

Hence, the discussion on this matter in the next FIRB meeting requires a more permanent measure from the interagency body."

Earlier, the FIRB decided that BPO firms have to resume full "on site" or in-premises work beginning Sept. 12 when the COVID-19-prompted state of calamity, declared by former President Rodrigo Duterte ends.

Peza stand

This was contrary to the Peza's plans to allow the WFH setup until March 2023, but the FIRB decided that the ecozone regulator could not unilaterally decide so.

Meanwhile, the FIRB has been coordinating with the Board of Investments in studying options to allow the WFH for BPOs.

Diokno himself earlier said that BPOs and other businesses that operate within ecozones should comply with the provisions of the CREATE's (Corporate Recovery and Tax Incentives for Enterprises) Law in order to achieve an effective tax incentives regime in the country.

Under Section 309 of the Tax Code, as amended by the CREATE Law last year, projects and activities registered with investment promotion agencies like Peza must be conducted within the geographical boundaries of the ecozone or freeport to be entitled to tax-free perks.

Also, the FIRB earlier ruled that the WFH arrangement for BPO players operating inside economic zones was only a temporary measure amid the stringent COVID-19 lockdowns in the previous two years.

Thus, BPO companies would only be able to enjoy their tax incentives if 100 percent of their personnel returned to their physical offices. INQ