The IT and Business Process Association of the Philippines (IBPAP) asks for an extension for the planned rationalization of tax incentives.
“We are looking for a longer sunset… The ability of our talent to move to digital technology will take a while,” IBPAP president and CEO Rey Untal told lawmakers during a hearing at the House of Representatives.
Last January, the Department of Finance submitted the limits on tax perks under the second package of tax reforms, which if enacted into law, the incentives on certain businesses could be amended to make up for the planned reduction of corporate income taxes.
While IBPAP was open to such proposals, the BPO industry would still need incentives for quite some time to remain competitive.
Untal said the tax incentives could be amended after a two-year transition period to prevent investors from doing business elsewhere.
Meanwhile, the Department of Finance has said the proposal would not fully eliminate tax incentives, only rationalize them.
The department proposed to either amend or repeal 123 special laws on investment incentives and consolidate what would remain into one omnibus incentive code. — via GMA News Online
Despite the threat of automation and artificial intelligence on the business process outsourcing sector, call centers expect to add around 60,000 to 70,000 agents annually over the next five years.
However, the estimation which was originally based on the 2016 roadmap — still depends on the outcome of the proposed second package of the Tax Reform for Acceleration and Inclusion program.
Contact association of the Philippines chairman Benedict Hernandez said the second package of tax reforms could affect the additional $1-billion revenue target in 2018.
“When we did this [roadmap], the TRAIN scenario was not there yet. But we haven’t changed it yet. If anything happens that will affect us, we might re-forecast,” Hernandez said.
Under the 2016 roadmap, the Philippine call center sector is projected to grow by seven to nine percent until 2022 and is expected to hit $13 billion in revenue in 2018. — via Manila Standard
The Philippines continues to be the world’s call center capital last year despite challenges that loom the industry.
In terms of market share, the Contact Center Association of the Philippines (CCAP) chairman Benedict Hernandez emphasized that the country remains as the number one.
“The Philippines continues to be the largest location for the delivery of contact services in the rest of the world. So as an outsourcing destination, we continue to dominate the number one spot as a country,” Hernandez said.
The country is forecasted to continue dominating the global contact center industry, taking 16 to 18 percent of its total share according to the data cited by CCAP from the Texas-based global consulting and research firm The Everest Group.
From a cultural, language empathy, customer centricity standpoint, the Filipino customer representative is really preferred around the world. There is also a cost advantage to doing work in the Philippines. If you combine all those qualities, plus cost advantage, then it becomes an attractive location for contact center services,” Hernandez said, highlighting the reasons why the country remains as the top choice.
In 2017, the Philippine contact center sector generated a revenue of $13 billion in 2017, which is slightly higher from the $12.77 billion revenue in 2016.
This year, CCAP expects the industry to expand by another seven to nine percent. — via Philippine Star
For more business process outsourcing (BPO) industry news, click here.