Philippines forms task force to inspect compliance on return-to-work orders

Businesses are told to either get back to office or give up tax perks

Philippines forms task force to inspect compliance on return-to-work orders

The Philippine Bureau of Internal Revenue (BIR) has formed a task force that will inspect the compliance of businesses to the government's return-to-office orders.

It comes after registered business enterprises (RBEs) in the Information Technology-Business Process Management (IT-BPM) sector that are enjoying tax incentives have been mandated by the Fiscal Incentives Review Board (FIRB) to bring their employees back to offices starting April 1.

This is part of the conditions stipulated in the National Internal Revenue Code of 1997, as amended by the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act, where RBEs may enjoy their tax perks as long they carry out work within the special economic zones or freeports where they are located and registered.

In a media release from the Department of Finance (DOF), BIR Deputy Commissioner Arnel Guballa has informed Finance Secretary Carlos Dominguez III that the bureau already issued mission orders that will allow inspections on RBEs to ensure their compliance to the return-to-office mandates.

But according to Dominguez, the return-to-office requirement is not necessarily a requirement for RBEs in the IT-BPM sector. This is because they could still extend their work-from-home arrangements with staff beyond the March 31 deadline, however, they would need to surrender their tax privileges.

"No one is prohibiting them or impinging on their management prerogative to continue implementing their WFH setups. However, they must give up the tax incentives they currently enjoy because the law is clear on this," said Dominguez in a statement.

Read more: Philippines hikes compensation for minimum wage earners

The government previously allowed RBEs from the IT-BPM sector to implement work-from-home policies for their staff without losing their tax perks due to the COVID-19 pandemic.

However, the said policies were only meant to last until March 31, with businesses' appeals to extend them denied.

According to the DOF, the country's pandemic situation has already allowed workers to return to offices safely.

"Given the increasing vaccination rate of Filipinos nationwide, we can now undertake safety measures for the physical reporting of employees," said DOF Assistant Secretary and FIRB Secretariat Head Juvy Danofrata in a statement.

"In fact, the president has ordered all government agencies and instrumentalities to adhere to the one hundred percent on-site workforce under Alert Level 1."

Many areas in the Philippines, including the National Capital Region, are placed under the least restrictive Alert Level 1 as COVID-19 cases remain low.

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