• By quade
• 12 August 2024

Wipro BPO Postpones Expansion Plans over CITIRA Taxes

Wipro Philippines Inc. is one of the largest Indian BPOs in the country, employing over 8,000 Filipinos. Wipro BPO however has announced that they are shelving any current expansion plans for the time being.

Their reason for this is the proposed tranche of tax reform called the Corporate Income Tax and Incentive Rationalization Act. If these taxes push through, it will affect the amount of taxes paid by businesses like Wipro and they would first want to review their position before committing to expansion.

Wipro BPO Shelves Expansion Plan

At the moment, Wipro BPO maintains two facilities, one in Manila and another in Cebu which employs a total of 8,000 people. 

Since the beginning of its operations, the company has been active in recruiting new employees. According to Aseem Roy, the company added between 2,000-2,500 new employees in 2018 which represents a huge increase. For comparison, they only hire an average of 400-500 in previous years. 

Roy explained that they have currently been scouting for new sites to expand their site. However, these plans have been placed on temporary hold depending on the upcoming CITIRA bill which would be the upcoming tax program.

“We have been more conservative with our expansion because of CITIRA. If there’s a customer who’s doing business, they’re not going to simply sign here. That is now holding us back. It doesn’t make sense right now,”

-Aseem Roy, Head of Wipro BPO Philippines.

Wipro BPO Looking for Clarity

However, while Wipro BPO is concerned about these developments, they insisted that they have no plans of leaving the country. The success they enjoyed in 2018

Roy clarified that the company had no plan to leave the country after having an impressive year in 2018. This shows businesses that even with these changes, there is still great potential in the BPO industry in the Philippines. 

What the BPO is looking for is clarity to understand what the situation is and how they will be affected by the new bill. He criticized the government for not making it clear how foreign companies like them would be affected by the policy. 

“Because when you sign a deal with a customer, you know that there’s going to be no changes. The tax incentives are going to stay as they are. All we are seeking is clarity. We will put a date and time and see how it is going to be in 2020.”

-Aseem Roy, Head of Wipro BPO Philippines.

“As an investor who is keen on generating employment here, we want stability in policies,”

-Aseem Roy, Head of Wipro BPO Philippines.

Roy explained his position at the recent 4th ASEAN-India Business Summit. Part of this event was a two-day summit organized by the Philippine-India Business Conclave.

Roy attended these events and met up with both fellow BPO leaders and government officials. He hopes to explain his standing to these visitors and allow them to find a solution to the dilemma.

This shows that BPOs remain a respected industry and the Philippines is still a lucrative market. All that matters is greater cooperation to create more agreements and broaden trade.

However, until the company gets the necessary clarification, it will halt expansion plans. 

“We had a dialog with our officers to determine where we should put out money in. I’m sure that the government does not want employment to decrease in the provinces to which we all agree.

-Aseem Roy, Head of Wipro BPO Philippines.

How Will the BPO Industry Be Affected By the CITIRA Bill?

Wipro BPO will not be the only business affected by the upcoming tax plan. Other global BPO players might be affected by the tax program and start to withdraw their investments if they are negatively affected. The changes in tax collection might cause them to rethink their investment.

Conversely, those BPO services that operate in the country and have made preparations can have room to expand and increase their services. With less competition, they can potentially increase their service capabilities.