Roxas suggests adding tax incentives for BPO companies to train workers
MANILA, Philippines – Senatorial candidate Mar Roxas suggested giving incentives to companies, which would train their employees to allow the country’s business process outsourcing (BPO) industry to reinvent itself.
The former trade secretary answered questions from BPO workers about the prospects of the industry in a forum held at the Novotel Manila Araneta Center on Thursday evening, April 11.
Asked what must be done to build on the skills of BPO employees, Roxas proposed rewarding companies that would train workers with additional tax incentives. He also disagrees with removing existing tax exemptions in the BPO industry.
“Proven na ‘yong business model [that] coming to the Philippines is a good idea. Hindi na natin sila kailangang i-incentivize na pumunta dito. Ang dapat nating gawin palitan natin 'yong incentive…. incentivize natin sila na i-train 'yong mga tao nila for the next-level process and the next-level jobs,” said Roxas, who is credited for helping bring the BPO industry to the Philippines in 2000.
(The business model that coming to the Philippines is a good idea has already been proven. We no longer need to incentivize them to come here. What we need to do is to change the incentives…. Let’s incentivize them to train their people for the next-level process and the next-level jobs.)
“It’s in their interest to train their workers to move up. So, in that case, we can incentivze the training of Filipinos. The companies themselves will do the training, and the incentive will be a deduction or double deduction in their taxes,” he added.
The BPO workers at the forum listened intently to Roxas, and laughed whenever he cracked a joke or two while answering their questions. When the forum ended, several audience members asked for selfies with Roxas, who ran but lost in the 2016 presidential race.
In the same forum, Roxas said updating the incentives would help the BPO industry keep up with present-day challenges, which he said includes artificial intelligence, machine learning, and big data.
“So dapat 'yong ating package – incentives, education, infrastructure, amenities, etcetera – dapat angkop sa challenges of today. 'Di natin puwedeng mabenta o maakit na dito sila mag-locate kung ang package ay pang-2000 na parameters…. Dapat nasa pang-2025 ang parameters natin,” said Roxas.
(So our package – incentives, education, infrastructure, amenities, etcetera – should keep up with the challenges of today. We cannot convince them to locate here if our parameters are for the year 2000…. Our parameters should be for 2025 already.)
When he was the chief of the Department of Trade and Industry during the Estrada presidency, Roxas saw the potential in the BPO industry and reached out to key leaders to promote foreign investment. (READ: A history of the BPO industry in numbers)
Roxas had strongly lobbied for the passage of the law revising Republic Act 7916 so that buildings or floors in buildings could register as economic zones. This meant BPO industries were exempt from paying national and local taxes, and only had to contribute 5% of their gross income as tax.
The pending Tax Reform for Attracting Better and High Quality Opportunities (Trabaho) bill aims to repeal at least 120 special laws on investment incentives and consolidate them under one omnibus incentive code. It would also lower corporate income tax rates.
The Philippine Ecozones Association previously warned the Trabaho bill would have a negative impact on foreign direct investments in economic zones across the country.
This would mean job losses, lower production output and exports, capital flight, and other setbacks that would offset the gains in ecozones. – Rappler.com