Tax Authorities Should Keep Up with the Global Trend towards Flexible Working – ADB

Cognitive tasks that require data interpretation, analysis and creative thinking — traits common among higher-educated and skilled workers — can be done from home, an Asian Development Bank economist said.

“What we’re seeing around the world is that companies and workers are in information-related jobs Shift to hybrid and even remote work arrangementssaid Sameer Khatiwada, ADB Southeast Asia Social Sector Specialist business world in an email.

Despite the global trend towards hybrid or remote work, Business Process Outsourcing Companies (BPOs) in the Philippines operating in Economic Zones are required to operate on-site by September 2022 when the home office facility expansion is approved by the Fiscal and Incentives Review Board ends.

Rather than requiring on-site work to enable effective oversight of tax incentives, Mr Khatiwada said that “tax authorities need to find innovative ways to strengthen tax oversight and compliance in hybrid or remote work arrangements.”

Cognitive jobs that can be done remotely include product design, software development, and call center operations. Back-office operations can also be done from home, although these are threatened by automation, according to Mr Khatiwada

In an ADB blog on May 17thhe distinguished cognitive jobs from manual jobs that cannot be done from home, such as driving a truck or waiting tables in a coffee shop.

According to a 2012 study in which Philippine Accounting of the 427 occupations surveyed, only 8%–10% classified all tasks as remote; 35-37% cannot be done remotely. The rest is a combination of on-site and remote tasks.

The pandemic has hit some professions harder than others. Service sectors such as food and transport have been victims of the lockdown and physical distancing measures. The same was true for those in manufacturing and construction who had to deal with these disruptions.


The self-employed were also more affected than their employees. according to the December 2021 ADB study on the Southeast Asian labor market. The study found that this segment tends to be in the informal sector and that those who are less skilled are less likely to switch to telework.

As a result, they are at greater risk of unemployment and loss of income in times of crisis.

Freelancers can make their income more resilient if they can diversify their clients, including by expanding their skillset into related fields, Mr Khatiwada said.

“The pandemic has also made it clear that many were not eligible for government support given the non-standard form of freelancer employment contracts and the safety nets put in place during the pandemic,” he added. “You have to rethink and build more comprehensive, inclusive and sustainable employment or income insurance schemes move forward.”

The government can enact either expanded social unemployment insurance or an income protection scheme to support the transition of all workers into the “future of work,” according to Kelly Bird, ADB country director in the Philippines.

“Two alternative models that might be applicable to the Philippines are the Malaysian employment insurance system and the Chilean unemployment insurance system, [the latter of which] consists of individual savings accounts and a state solidarity fund,” he said business world in an email. “The second intervention is company-based skills development programs that give workers access to lifelong skills development.”

ADB, Mr. Bird added, is working with the Departments of Trade and Industry, Labor and Employment, and Tourism to pilot SkillsUpNet Philippines.

“This will provide grants to networks of companies in priority sectors to upskill or reskill workers and job seekers,” he said.

With these “networks, digital competence training can be integrated [in turn] can support hybrid forms of work.”

Mr Khatiwada added, “Remote work is not possible without connectivity, so governments need to prioritize investments in infrastructure that enable workers to be productive in a hybrid environment,” said Mr.

Nine out of ten employees prefer a hybrid or remote work environment, based on a January survey of 8,184 workers by Sprout Solutions. — PWM

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