Philippines Weighs Eliminating Call Center Tax Breaks

January 30, 2015

Despite all the noise about call centers relocating back to the U.S. from overseas locales, the industry is still going strong in the Philippines. A recent report noted that some 94 percent of its call center industry is with American companies, who outsource their business to the island nation.

But that success may be in jeopardy. According to a report in Business World Online, a Filipino publication, there’s a movement taking shape to do away with a current “income tax holiday” on call center business.

“The government should hold and re-think the proposed amendment to erase the income tax holiday from [a] list of incentives [currently being considered], as many foreign companies will find our country not that good for business, especially with a lot of countries giving better and bigger incentives than the Philippines.” That comment was made by Benedict C. Hernandez, current president and chairman of the Contact Center Association of the Philippines (CCAP), speaking while attending an industry conference in the Philippines’ Pasay City.

As if the threat of removing a tax break for call centers wasn’t enough of a concern, Hernandez also noted that finding individuals with the necessary skill set to work in a call center is a growing challenge.

“If we want to surpass or even achieve the (industry’s) 15 percent growth forecast, we need to ‘man up’ our workstations, but now, there’s lack of qualified talent so we’re having a hard time in that respect,” he told Business World Online.

In 2014, CCAP posted revenue of $11.7 billion, up from $10 billion a year earlier. For 2015, the group is forecasting $13.5 billion in revenue, hoping to maintain its 15 percent to 18 percent growth projection.

In response to industry concerns, Philippine President Benigno S. C. Aquino III said in his closing remarks at the conference in Pasay City that the government is eager to work with the industry in building a more inclusive economy.

“Our administration is aware that among the concerns of your industry is finding individuals with the necessary skill sets to man your workstations,” he said. “This is why we have focused on improving programs like the Training for Work Scholarship Program.”

So far, Aquino said the government has allocated P125 million to roll out the program in 17 pilot state universities and colleges both in metro Manila and smaller cities.

Leave a Comment

Your email address will not be published. Required fields are marked *