News : Inclusion of IT-BPO in 2014 IPP Pushed
May 15, 2014 -- The DTSI Group pushed for the inclusion of information technology and business-process outsourcing (IT-BPO) in the 2014 Investment Priorities Plan’s preferred activities to allow the industry to continue enjoying government fiscal and non-fiscal incentives.
DTSI President and Chief Executive Officer Miguel Antonio C. Garcia, a long-time advocate for the IT-BPO sector, said the IT-BPO industry deserves to continue receiving incentives from the government due to its consistent significant contribution to the Philippines economy, generating both revenue and employment opportunities.
"The IT-BPO industry has consistently proven to contribute, if not boost, economic activity in the country," Garcia said. "There is no doubt that the industry has put the government’s fiscal and nonfiscal incentives to good use, which include income-tax holidays; option to pay 5-percent tax on gross income for companies operating from special economic zones or technoparks accredited by the Philippine Economic Zone Authority; duty-free importation of capital equipment; and hiring of foreign nationals. The country continues to benefit from the industry’s many initiatives."
Garcia added that the government is expected to receive up to five times of its return on incentives from the IT-BPO industry. This is based on the industrial impact assessment from 2005 to the present featured in the Information Technology and Business Process Association of the Philippines’s road map for 2016.
Garcia went on to say: "During that period, the government provided about $1.1 billion to $1.4 billion in incentives to both BPOs and global in-house contact centers. In return, the industry contributed around $4.4 billion to $5.4 billion in revenues to the national government by way of corporate, personal and other taxes."
A joint effort by the Ibpap and the Everest Group, the IT-BPO Roadmap for 2016 has been submitted to Undersecretary Adrian S. Cristobal, managing director of the Board of Investments (BOI) and head of the Department of Trade and Industry’s Industry Development and Trade Policy Group. The road map highlights how the IT-BPO industry created 900,000 new jobs in 2013, a figure that is expected to hit 1 million by the end of 2014. The BOI has been consulting with the Ibpap and other stakeholders on the inclusion of the IT-BPO industry in its new incentives scheme.
Along with generating employment, the Philippines outsourcing industry contributed $13.3 billion to the national economy by the end of 2013, an increase of 15 percent compared to its contribution at the end of 2012. Garcia, however, noted that the continued grant of incentives to the IT-BPO industry is a critical factor for achieving the Ibpap’s 2016 target of generating $25 billion in annual revenues and 1.3 million direct jobs.
Posted by Veronica Silva Cusi, news correspondent
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Published: Monday, May 19, 2014