EIGHTEENTH CONGRESS OF THE) 
REPUBLIC OF THE PHILIPPINES ) 
Third Regular Session 
)
SENATE
S.B. No. 2306
E-FILEO
June 29 2021 m
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date:
TW.1P--..1:55 P-m
iKTDEX
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 living, 
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 peopid'. 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 the Department of Health (DOH). On 12 March 2020, 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. Such lockdown is the beginning of the longest, most stringent, and 
arguably the costliest lockdown in the world, which continues up to the present day.
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.
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 the 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 activities 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 
teiecommuting pursuant to R.A. No. 11165 ov the "Telecom muting Act"
In view of the foregoing, the approval of this bill is earnestly sought.
IMEE R. MARCOS


EIGHTEENTH CONGRESS OF THE) 
REPUBLIC OF THE PHILIPPINES ) 
Third Regular Session 
)
SENATE
S.B. No. 2306
FLED
KfD'E
Introduced by SENATOR IMEE R. MARCOS
AN ACT AMENDING SECTION 309 OF THE NATIONAL INTERNAL REVENUE 
CODE, AS AMENDED, AND FOR OTHER PURPOSES
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Be it enacted by the Senate and House of Representatives of the Phiiippines in Congress 
assembied:
SECTION 1. Section 309 in Chapter VI "Transitory and Miscellaneous Provisions" 
of the National Internal Revenue Code of 1997, as amended, is hereby further 
amended to read as follows:
"Sec. 309. Prohibition on Registered Activities. - A qualified 
registered project or activity under an Investment Promotion Agency 
administering an economic zone or freeport shall, AS FAR AS 
PRACTICABLE, be exclusively conducted or operated within the 
geographical boundaries of the zone or freeport being administered by 
the Investment Promotion Agency in which the project or activity is 
registered: Provided, That a registered business enterprise may conduct 
or operate more than one qualified registered project or activity within 
the same zone or freeport under the same Investment Promotion 
Agency: Provided, further. That any project or activity conducted or 
performed outside the geographical boundaries of the zone or freeport 
shall not be entitled to the incentives provided in this Act, unless such 
project or activity is conducted or operated under another Investment 
Promotion Agency: PROVIDED, HOWEVER, THAT WORK-FROM- 
HOME ARRANGEMENTS OR "TELECOMMUTING," AS PROVIDED 
IN R.A. NO. 11165 OTHERWISE KNOWN AS THE 
"TELECOMMUTING ACT" SHALL BE CONSIDERED AS ACTIVITIES 
CONDUCTED OR OPERATED WITHIN THE GEOGRAPHICAL 
BOUNDARIES OF THE ZONE OR FREEPORT BEING 
ADMINISTERED BY THE IPA, INASMUCH AS SUCH WORK-FROM- 
HOME ARRANGEMENTS DOES NOT EXCEED 50% OF THE TOTAL 
REVENUE."


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SEC. 2. Repealing Clause. - All laws, decrees, orders, rules and regulations or
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other issuances or parts thereof inconsistent with the provisions of this Act are hereby
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repealed or modified accordingly.
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SEC. 3. Separability Clause. - If any portion or provision of this Act is declared
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unconstitutional, the remainder of this Act or any provision not affected thereby shall
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remain in force and effect.
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SEC. 4. Effectivity. - This Act shall take effect after fifteen (15) days following
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the completion of its publication either in the OfTicial Gazette or in a newspaper of
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general circulation in the Philippines.
Approved,