Lapu-Lapu City wants to attract KPO companies
IN ADDITION to positioning Lapu-Lapu City as a leisure and manufacturing destination, its municipal government is also keen to welcome operators in the Knowledge Process Outsourcing (KPO) industry.
KPO is the outsourcing of core business information related activities. This involves outsourcing the work to people who typically have advanced degrees and expertise in a specialized field.
“Most of our investors are in manufacturing and tourism. Looking forward, we also want to anchor our future in KPO, ”said Edward Mendez, Tourism Manager for Lapu-Lapu City, in a meeting with members of the European Chamber of Commerce in the Philippines.
“We are known to be creative people and we want to attract high added value services,” he added.
But currently, according to Mendez, the city of Lapu-Lapu is receiving numerous requests from Filipino offshore gambling operators (Pogo) to settle on the island.
“There were three operators who requested office space from Mactan for Pogo. However, we cannot accommodate them because we are running out of space, ”he said.
Meanwhile, during the open forum, Cebu IT BPM.Organization (Cib.O) General Manager Wilfredo Sa-a Jr. expressed concern from the business process management and technology industry. information regarding the influx of Pogo to Cebu, claiming that this new company stole job opportunities from premises and skewed office rental rates.
“Our industry is concerned about the Pogos because they have so much money and these companies are not hiring Filipinos,” Sa-a said.
Mendez said that the rise of Pogo is a phenomenon that the industry and the local government unit cannot stop, especially if the operators are Pagcor (Philippine Amusement and Gaming Corp.) and respect taxes.
Some of the operators, he added, would pay five years up front just to help developers build an office for them.
“But in the city of Lapu-Lapu, we want to see a variety of industries operating here,” Mendez said.
Meanwhile, the national government said it collected a total of 6.42 billion pesos in taxes from Pogos and their service providers in 2019, or 4.04 billion pesos or 169% more. that the collection of 2.38 billion pesos from these companies in the previous year.
On February 11, 2020, the Senate introduced a bill to impose a 30% income tax on all Pogos in the country.
President Senator Pro Tempore Ralph Recto introduced Senate Bill 1295 which will establish a tax regime for the Pogo sector.
Under the new bill, licensed Philippines-based Pogos, local gaming agents and service providers will be subject to a 30 percent income tax and a five percent franchise tax.
The taxable amount will be derived in the previous tax year from all sources inside and outside the Philippines.
The five percent franchise tax will be imposed on all gross revenue from gaming operations of Pogo companies based in the Philippines and overseas.
“Despite the fact that Pogo is a growing industry in this country, the peculiar nature of its business activity creates confusion in the application of our existing tax laws. Establishing the Pogo tax regime, and incorporating it into the National Internal Revenue Code of 1997, is necessary to remove any doubt and avoid confusion as to whether Pogos are taxable in our jurisdiction, ”Recto said. (KOC)