ICT councils warn against removal of tax perks for rural BPOs

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BACOLOD CITY — The National Information and Communications Confederation of the Philippines (NICP) has urged Pres. Rodrigo Duterte and Congress to retain and expand the current fiscal incentives of information and communications and technology-business process management (ICT-BPM) companies under the proposed tax reforms.

Photo credit: http://cityofbacolod.com
Photo credit: http://cityofbacolod.com

Jocelle Batapa-Sigue, trustee and head of the public sector and policy committee of NICP, said this would enable the industry to generate jobs and investments especially in the countryside.

Batapa-Sigue, also executive director of Bacolod-Negros Occidental Federation for ICT (BNEFIT), said that by reducing or removing the current set of tax incentives for ICT-enabled industries, the provincial locations, which currently take advantage of national incentives under a centralized government structure, would be severely affected.

?Introducing value added tax on business process outsourcing (BPO) services and imposition of new taxes on the ICT industry could have very damaging repercussions for growth, expansion, and sustainability in the countryside,? she added.

The NICP, composed of ICT councils nationwide, said an increase in cost will affect the current benefits of employees and force companies to consider other countries for their operations.

Aside from retention of tax incentives, the confederation also appealed that companies be allowed tax deductions for any relevant talent development programs it will invest in to ensure quality talent in the countryside.

?We fully support the goal of the administration to create jobs and investments for inclusive growth. All our member-councils vow to contribute one million jobs by 2022 in the countryside,? the NICP said.

Moreover, Batapa-Sigue said the proposed tax reforms were laudable in terms of increasing the net income of the middle class by reducing individual income tax base.

However, she said that taxation was not only a means to generate revenues since it is also a tool to develop and grow industries that are relevant and sustainable especially in areas where there were less jobs and opportunities.

?Across the globe, developing countries use tax incentives as a means to attract direct foreign investments to solve unemployment, engage in technology transfer and intensify development of preferred industries,? Batapa-Sigue added. — Erwin P. Nicavera, PNA

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