Plan to Revive Tax on Overseas Filipinos Opposed

Plan to Revive Tax on Overseas Filipinos Opposed

Bien Custodio & Julie Javellana-Santos, Arab NewsRIYADH/MANILA,

— A proposal to restore the tax on the incomes of Overseas Filipino Workers (OFWs) has come under fire from migrant workers and other advocates, some of whom have decried it as “an effort to bleed OFWs” hard-earned income dry.”

“Before the BIR even cast their glance once again on OFWs for fleecing, they better clean up their acts first,” said Mike Bolos, an overseas absentee voting advocate in Riyadh.

He said the proposal to restore the tax on OFWs appears to be a “short cut and an easy way out of the problem of sagging tax revenue.”

Manuel Amora, a community leader in the industrial areas also of Riyadh, warned that the idea being floated could backfire on the Philippine economy.

“They must be careful in making such proposals because it is an insult and it could scare us into withholding our remittances,” he said.

“Blaming the low income tax collections to OFWs is a nonsense statement. Why not check and go after those multi-million peso companies in the Philippines who continue to evade paying their taxes?” Amora added.

Hernan Obenita, a secretary at a mining company in the Kingdom, suspected that the government of President Gloria Macapagal Arroyo may be getting desperate because it may have used much of the government’s money for electioneering.

“Tiga-sagip o taga-takip ba ang mga OFWs ng mga gago sa gobyerno para huwag silang mapulaan sa kanilang mga tiwaling gawain? (Are we being made again to make up for the irregularities committed by these fools in government?” he asked.

Alex Asuncion, a Bagong Bayani awardee, also wondered what’s wrong with President Arroyo’s administration that it is trying to take back what was given to OFWs by the Ramos administration.

“Kaya nga inalis na yan sa atin dahil malaki na ang naitutulong natin sa pamamagitan ng ating remittances (That’s why that burden was removed from us because we are already helping our country a lot through our remittances),” he said.

Deputy Commissioner Kim Henares of the Bureau of Internal Revenue (BIR) first floated the proposal on Friday amid a drop in the government’s revenue collections, which he blamed on the OFW tax exemption law.

Filipino migrant workers used to pay one to two percent on income earned abroad.In 1997, Congress revised the Tax Code and scrapped the tax, saying the country’s 4.6 million or so Filipino contract workers needed a break.

The dollar remittances of overseas Filipinos, placed last year at about $7.6 billion, has become one of the pillars of the Philippine economy. The amount includes only those remittances made through the banking system. There are still many who send their money home through the “illegal” door-to-door services.

“The exemption of OFWs from income tax payment is well-grounded due to the sector’s huge influx of dollar remittances to the economy plus revenues government collects from OFWs who pay fees to process their certificates, clearances, passports, artist record books, seaman’s books and other travel documents,” said John Monterona, vice chair of the Migrante Party-list group.“Domestic helpers, engineers, ship captains, entertainers and all types of OFWs should not be burdened by the government to pay taxes. The contributions and sacrifices from the overseas Filipino sector is more than enough to keep the country’s floundering economy afloat,”
Monterona asserted. “It is enough that OFWs suffered wage cuts in Hong Kong, Saudi Arabia, Taiwan and elsewhere,” he added.

Monterona also chided the Arroyo government for not being satisfied after “forcing every OFW to pay $25 for OWWA membership fees per contract that do not redound to full services and benefits to their families.”

The National Tax Research Center (NTRC), the original proponent of restoring OFW tax, however, said it was only aiming at highly paid Filipino workers abroad, such as engineers and ship captains.

It said low-income earners such as domestic helpers could have their tax exemption retained.NTRC Deputy Director Dante Sy was quoted as saying that exempting all OFWs from income tax was unjust because some of them could afford to pay taxes and help the government in its revenue generation efforts.

But Bolos of Riyadh countered: “Considering that about 90 percent of OFWs would fall under the category of low-income earners and are thus tax-exempt, not much will be achieved by the proposal to tax them.”

Instead, he said, it would only “expose them once again to abuse and fleecing by unscrupulous tax officials and embassy staff in their place of work reminiscent of the days in the past before the OFWs tax exemption has been granted.”

Bolos said what the government should do is to make sure that tax payments are not being diverted to the private accounts of some crooks in the department, and go after the smugglers who are depriving the government of substantial amount of tax revenues.


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