The increasing use of artificial intelligence (AI) -- not new tax measures -- are the real threat to the country’s business process outsourcing (BPO) sector, Finance Secretary Carlos Dominguez III said.
“The development of AI around the world is very rapid and it is going to certainly hit our BPO industry. And I think we must accept that,” Dominguez said in a briefing with journalists early this week.
He said explained this to BPO stakeholders in the past, in line with the planned reform of the Philippine tax system.
“I don’t know how they are preparing for this inevitable hit in the industry,” he said.
The Department of Finance (DOF) is pushing for the reform of incentives being given to businesses as it vies to increase revenues to finance the government’s massive infrastructure program.
The Duterte administration plans to invest as least PHP8 trillion in its “Build, Build, Build” program.
Dominguez said the government wants the incentives given to investors to meet four standards -- targeted, time-bound, transparent, and will greatly benefit the people.
He clarified that the bid to rationalize incentives “will not immediately cut-off any incentive.”
The finance chief also pointed out that “the government has no contractual obligation to give any incentives to anybody.”
“That is a privilege and that is the sovereign right of the government to change its tax incentives when (the) tax system no longer works. There is no contracting obligation,” he added.