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FEARING
that the removal of tax incentives will derail its
development road map, the local business process
outsourcing (BPO) industry has joined other domestic
sectors and the foreign chambers in calling for the
retention of fiscal perks topped by income tax holidays
a (ITH).
Oscar
Sañez, chief executive officer of the Business
Processing Association of the Philippines (Bpap), said
it will be very ridiculous for the Philippine government
to strip the industry of its incentives when the likes
of China, Indonesia and Malaysia “are copying our
incentives.”
“It
[incentives] is very critical. We could lose our
competitiveness,” he told the BusinessMirror.
Sañez
did not give actual estimates on how the industry’s
targets would be set back by the “no-incentives
scenario” although he stressed that the effect would be
very significant.
He said
the Bpap has submitted its position paper to Congress
supporting the stand of the Joint Foreign Chambers and
other local business groups for the retention of ITH and
other tax perks.
The
House of Representatives has vowed to concentrate on
four bills for the rationalization of fiscal incentives
when sessions resume next week.
The four
are House Bill 1757, or The Consolidated Investments and
Incentives Code of the Philippines, introduced by Rep.
Exequiel Javier; HB 2278, or Rationalizing the Grant and
Administration of Fiscal and Nonfiscal Incentives, and
for Other Purposes, introduced also by Javier; HB 2530,
or the The Investments and Incentives Code of the
Philippines, by Rep. Junie Cua; and HB 2712, or
Rationalizing the Grant and Administration of Fiscal and
Nonfiscal Incentives, and for Other Purposes, by Rep.
Thelma Almario.
Sañez
said instead of removing incentives as what the
Department of Finance and some lawmakers are advocating,
the government should even extend it.
The
perks the government is giving, he said, are more
important at this time when the companies’ profit
margins are being hit by the sharp appreciation of the
peso and high power costs. He said their profit margins
have dropped by at least 15 percent in 2007. The small
ones are already saying that they will probably just
close down,” he said.
The BPO
sector, according to its development road map, is
targeting to expand its manpower to one million by 2010
from the current 320,000.
This
year, the industry targets revenue of $7 billion from
about $5 billion in 2007. |
