Tax reform puts BPO competitiveness in peril, says CCAP (June 3, 2017)
Contact Center Association of the Philippines (CCAP) president Jojo Uligan said the planned rationalization of fiscal incentives has sent jitters to its member companies.
“There are currently companies asking us what’s the real story and what’s going to happen. It (the government incentives) is one of the things why they went to the Philippines and that incentive actually somehow gives the Philippines a competitive advantage,” he said.
“If we have these incentives, we are able to compete. This is what the industry is working on at the moment so we’re having a dialogue with agencies,” he added.
The first package of the Department of Finance-sponsored tax reform program includes the removal of value added tax (VAT) exemption on BPO sales and imports.
Once the tax reform proposal is enacted, BPO firms’ transactions will be subject to VAT equivalent to 12 percent of gross receipts.
Uligan said while the country has other features and advantages to make it as a destination of choice among global BPO firms, the VAT incentive is important for the industry to remain competitive.
People are ‘secret sauce’ to growing BPO sector – Santos Knight Frank (June 1, 2017)
Asked how removing the tax incentive of BPO firms would affect the Philippines as an investment destination, Santos Knight Frank Chairman and CEO Rick Santos said there are more important things that make the country attractive to investors.
“I think the demographics are key. The Philippines has the people which are the secret sauce to the growth of BPOs,” he said.
If the measure makes it through the Senate and is enacted to law, a 12 would be imposed on the gross receipts of BPO companies.
“It really comes down to skills, the English, the age of the workforce … Those are the imperatives for the BPO firms,” Santos said.
Tax reform finds ally in BPO leader (June 1, 2017)
The Duterte administration’s Comprehensive Tax Reform Program (CTRP) yesterday received the backing of a business process outsourcing (BPO) industry advocate, saying the proposed law is favorable for both labor and management as it would raise the take-home pay of workers and enhance the workplace environment leading to higher productivity.
In a social media post, Call Center Philippines administrator Gerald Catapang said the CTRP was also a “win” for non-workers. Besides slashing income tax rates, he said the bill would also adjust other taxes to help the Duterte administration raise the extra P1 trillion it needs yearly for an aggressive spending program to improve the living standards of poor and low-income Filipinos.
“Reforming our personal income tax system will increase the monthly take home pay of call center agents by an average of P4,000, while adjusting other taxes will increase funding for health, training, and infrastructure investments crucial for the working environment of laborers,” Catapang said.
He said the CTRP’s first package, also known as the Tax Reform for Acceleration and Inclusion Act (Train), would adjust the outdated formula for income tax payments under the current system, which “has unfairly burdened the working class with rates that apply for higher income classes.”
DICT pushes stronger cybersecurity for industry growth (May 30, 2017)
DICT Assistant Secretary Allan Cabanlong, in-charge for cybersecurity and enabling technologies, said during his recent visit to Bacolod City that one of the greatest problems of any business is disruption or “attack.”
This disruption could be cyber-attack or network glitch which could lead to industry operation shutdown.
Cabanlong pointed out that the BPO sector is one of the major contributors to the country’s gross domestic product.
In 2016, the sector contributed US$22 billion to the economy of the Philippines, he said.
“So just imagine if BPO firms will be shutdown like for a week, there is definitely a setback in the country’s economy,” Cabanlong said, adding that poor cybersecurity in the BPO industry could lead costumers and investors to withdraw resulting to unemployment among millions of local workers.
The DICT has included BPO as one of the 12 critical infostructures in the country that needs to be protected. Others include banks, airport, energy, and power grid, among others.
The protection of infostructures is one of the four key imperatives of the first National Cybersecurity Plan of the Philippines, which was launched on May 2.