NINETEENTH CONGRESS OF THE ) 
REPUBLIC OF THE PHILIPPINES ) 
First Regular Session 
)
SENATE
S.B. No. 643
of the S’- -relftry
’22 JUL 14 P4:00
RliCEiVrD BV;
Introduced by SENATOR IMEE R. MARCOS
AN ACT
AMENDING SECTION 309 OF THE NATIONAL INTERNAL REVENUE CODE, AS
AMENDED, AND FOR OTHER PURPOSES
EXPLANATORY NOTE
Section 9, Article II of the 1987 Constitution provides that, "The State shall 
promote a just and dynamic social order that will ensure the prosperity and 
independence of the nation and free the people from poverty through policies that 
provide adequate social services/ promote full employment a rising standard of livingf 
and an improved quality of life for all." Section 15 of the same Article further states 
that, " The State shall protect and promote the right to health of the people”. Lastly, 
Section 18 affirms labor as a primary social economic force and mandates the 
protection of the rights of workers and their welfare.
On 07 March 2020, the first case of localized COVID-19 transmission was 
confirmed by ihe Department of Health (DOH). On 12 March 2D20 the World Health 
Organization characterized COVID-19 as a pandemic. Due to these developments, as 
well as the rising number of COVID-19 cases in the country. President Rodrigo R. 
Duterte and the Interagency Task Force for COVID-19 (lATF) moved for the imposition 
of an Enhanced Community Quarantine (ECQ) for Metro Manila and adjacent provinces 
on 15 March 2021,
In light of the calls for a "New Normal' and a recognition that economic activity 
has to continue, the lATF issued Resolution No. 13 on 17 March 2020, which allowed 
Business Process Outsourcing (BPO) and export-oriented businesses to facilitate their 
work from home (WFH) arrangements. As most of the BPOs and export-oriented 
companies enjoy fiscal incentives under the Philippine Economic Zone Authority (PEZA), 
the PEZA issued Memorandum Circular 2020-011 which allowed these companies to 
institute WFH schemes. Such arrangement allowed BPO and export-oriented companies


to comply with the lATF rules and regulations for the Minimum Health Standards in the 
work place.
However, on 01 April 2022, PEZA-registered IT-BPOs vje^e back to the regular 
policy ratio of 70-30 on sales allowance and no more than 30% of WFH setup.
While the WFH scheme is only meant to be a temporary arrangement, the 
unplanned extension of the community quarantine and the continued COVID-19 threat 
made the extension of the WFH arrangement essential. In addition, the WFH 
arrangement became a comparative advantage of fhe Philippines over other countries, 
as it makes the Philippines more attractive to foreign investors, with new clients 
requiring that WFH schemes be available for their accounts.
Unfortunately, the IRR of Section 309 of the National Internal Revenue Code, as 
amended by R.A. No. 11354 otherwise known as "CREATE," does not support nor 
promote such WFH activ'ties to continue, as only activities conducted within the 
premises of the economic zones are entitled to avail of the incentives under CREATE. 
As such, there is a need to further amend Section 309 of the NIRC, as amended, to 
allow BPO and export-oriented businesses to avail of Incentives activities attributable 
to WFH arrangements. This would also be in line with the State's policy of promoting 
telecommuting pursuant to R.A. No. 11165 or \hex" Telecommuting Act"
For the foregoing reasons, the passage of this bill is earnestl/ sought.
EE R. MARCO:


NINETEENTH CONGRESS OF THE ) 
REPUBLIC OF THE PHILIPPINES ) 
First Regular Session 
)
S.B. No.
SENATE
643
if .-;V V„ 
CI i .11 ^
tr cf 111? €■»••• v('tav^
72 JUL 14 P 4 -00
RECEIVE BY. ___
Introduced by SENATOR IMEE R. MARCuS
AN ACT
AMENDING SECTION 309 OF THE NATIONAL INTERNAL REVENUE CODE, AS
AMENDED, AND FOR OTHER PURPOSES
Be it enacted by the Senate and House of Representatives of the Philippines In Congress 
assembled:
1 
SECTION 1. Section 309 in Chapter VI "Transitory and Miscellaneous Provisions"
2 
of the National Internal Revenue Code of 1997, as amended, is hereby further amended
3 
to read as follows:
4 
"Sec. 309. Prohibition on Registered Activities. - A qualified
5 
registered project or activity under an Investment Promotion
6 
Agency administering an economic zone or freeport shall, AS FAR
7 
AS PRACTICABLE, ba exclusively conducted or operated within
8 
the geographical boundaries of the zone or fraeport being
9 
administered by the Investment Promotion Agency in which the
10 
project or activity is registered: Provided, That a registered business
11 
enterprise may conduct or operate more than one qualified
12 
registered project or activity within the same zone or freeport under
13 
the same Investment Promotion Agency: Provided, further. That
14 
any project or activity conducted oi performed outside the
15 
geographical boundaries of the zone or freeport shall not be entitled
16 
to the incentives provided In this Act, unless such project or activity
17 
is conducted or operated under another Investment Promotion
18 
Agency: PROVIDED, HOWEVER, THAT WORK-FROM-HOME
19 
ARRAr GEMENTS OR "TELECOMMU TING" AS PROVIDED IN
20 
R.A. NO. 11165 OTHERWISE KNOWN AS THE
21 
"TELECOMMUTING ACT" SHALL BE CONSIDERED AS


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IS 
20
ACTIVITIES CONDUCTED OR OPERATED WITHIN THE 
GEOGRAPHICAL BOUNDARIES OF THE ZONE OR FREEPORT 
BEING ADMINISTERED BY THE IPA DURING TliE EVENT OF 
A STATE OF NATIONAL EMERGENCY OR STATE OF 
CALAMITY AFFECTING THE ZONE OR FREEPORT IN WHICH 
THE PROJECT OR ACTIVITY IS REGISTERED, INASMUCH AS 
SUCH WORK-FROM-HOME ARRANGEMENTS DOES NOT 
EXCEED 50% OF TH5 TOTAL REVEr^UE."
SEC. 2, Repealing Clause. - All laws, decrees, orders, rules and regulations or 
other issuances or parts thereof inconsistent with the provisions of this Act are hereby 
repealed or modified accordingly.
SEC. 3. Separability Clause. - If any portion or piovislor. of this Act Is declared 
unconstitutional, the remainder of this Act or any provision not affected thereby shall 
remain In force and effect.
SEC. 4. Effectivity. - This Act shall take effect after fifteen (15) days following 
the completion of its publication either in the Official Gazette or in a newspaper of 
general circulation in the Philippines.
Approved,