BIR halts ‘surprise’ visits, audits of ecozone locators

The Bureau of Internal Revenue (BIR) has temporarily suspended its “surprise” visits and audits into the books of economic zone locators, according to the Philippine Economic Zone Authority (Peza).

“We are glad that the BIR listened accordingly, they are now suspending their surprise audits and surprise visits to our locators so we are looking forward that it will be printed black and white by the [fiscal incentives review board] FIRB and we are now observing the status quo,” said Peza Director General Charito B. Plaza during the signing of a memorandum of understanding (MOU) between Peza and Department of Environment and Natural Resources (DENR).

The Peza chief emphasized that BIR earlier conducted surprise inspections and even threatened economic zone locators that they would be penalized if they didn’t comply with the 100 percent on-site work order.

“The BIR were doing surprise inspections, telling our locators that they’re going to be facing or paying penalties for violating the order of 100 percent on-site work,” added Plaza.

Just two weeks ago, according to a report to the Department of Finance (DOF) by Internal Revenue Deputy Commissioner Arnel SD. Guballa, the BIR had issued mission orders to undertake ocular inspections of registered business enterprises’ (RBEs) place of business. Guballa said that these personnel would determine whether the RBE is following the on-site work rules, which were part of the conditions for the grant of their incentives under the Corporate Recovery and Tax Incentives for Enterprises (Create) law (Republic Act 11534).

The DOF interestingly issued the statement a week after Peza said it received reports that registered IT-BPM companies are losing their employees to “underground” entities in the same sector operating in a work-from-home (WFH) setup.

The Peza chief also appealed earlier to those rushing the return-to-work deadline “not [to] rock the boat” while the country is still in the middle of a pandemic and global economic crisis.

Plaza has always urged the government to listen to the plight of the IT-BPO sector in pushing for continued WFH arrangement because we are not out of the woods yet as the Philippine economy’s still bearing the brunt of the pandemic, the Russia-Ukraine conflict and other global economic issues.

Meanwhile, the Peza chief expressed gratitude to Senator Imee Marcos, chairperson of the Senate Committee on Economic affairs, who according to Plaza, “defended our industries [and] she’s one big voice who also requested the DOF, FIRB, for a status quo to be sensitive to the needs, sentiments of our registered enterprises because we are still not off from this pandemic, we still are facing the effects of the Ukraine war plus the global recession.”

The senator previously called out the DOF amid rising fears that the IT-BPO sector—a “golden goose” in government’s exports revenues and a vital job generator—is hurting from the government’s insistence on compelling them to make their employees return to on-site work right away, under the pain of losing their incentives.

Marcos said two weeks ago “companies in export zones are now afraid of losing their tax incentives if they do not resume all operations on-site. But their work-from-home programs were approved as early as 2017, which the Telecommuting Act of 2018 also supports.”

To elaborate, Marcos earlier cited reports that despite two years of the pandemic and under WFH conditions, the IT-BPM sector even grew its work force by 8.9 percent to 10 percent and its revenue by about 9.5 percent to 14.5 percent, quoting Peza data.

Marcos echoed Peza’s call to extend WFH set-up until the end of the government’s state of calamity declaration in September.

With this, Plaza looks forward that the incoming administration will institutionalize the WFH arrangement.

“We’re looking forward in the next administration that WFH will be institutionalized to include already the security of  tenure, the protection and other benefits of the workers who will be under the WFH scheme,” said the Peza chief.