Philippine gov't to inspect firms with return-to-office orders

Updated: Jun 22

THE PHILIPPINES: The Philippine Bureau of Internal Revenue (BIR) has organized a task force to monitor the compliance of businesses with the government's return-to-work directives.

The announcement comes after the Fiscal Incentives Review Board (FIRB) ordered registered business enterprises (RBEs) in the Information Technology-Business Process Management (IT-BPM) sector that are receiving tax breaks to send their employees back to work beginning April 1.

This is one 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, under which RBEs can get tax breaks as long as they are located within the special economic zones or freeports where they are registered.

According to a press release from the Department of Finance (DOF), BIR Deputy Commissioner Arnel Guballa has notified Finance Secretary Carlos Dominguez III that the bureau has already issued mission orders for the inspections of RBEs and their compliance with the return-to-office regulations.

However, Dominguez reiterated that RBEs in the IT-BPM sector are not required to follow the return-to-office directive. They could still implement their work-from-home arrangements with workers through the March 31 deadline, but they would have to give up their tax advantages.

"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.

The DOF stated that the country's improving pandemic situation has given workers the chance to return to work 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," they added.

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