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Defensor vows to reinforce tax-exempt status of OFWs


Administration senatorial candidate Mike Defensor said Monday he intends to push the enactment of a bill that will reinforce the tax-exempt privilege currently enjoyed by some eight million overseas Filipinos, mostly contract workers. "This will prevent the Bureau of Internal Revenue and rotten agents from exploiting any legal ambiguities that might be used as an excuse to unjustly harass overseas Filipino workers for (Philippine) individual income tax purposes," said Defensor, former presidential chief of staff. Defensor earlier dismissed as "foolish" and “counter-productive" the BIR's plan to lessen the tax incentive given to OFWs. "We will definitely not allow the watering down of the tax benefit being enjoyed today by OFWs," Defensor stressed. At the same time, he said the next Congress should require the Philippine Overseas Employment Administration (POEA) to produce an admissible "proof of personal income" for OFWs, as earlier proposed by a labor group. "This will enable OFWs to promptly obtain credit for livelihood support projects or small enterprises, apart from encouraging them to engage in other financial dealings here," Defensor said. The Trade Union Congress of the Philippines earlier lamented that OFWs and their families find it difficult to secure bank loans here. This is because they do not possess any Philippine income tax returns (ITRs). The labor group said the lack of ITRs has clearly become a practical issue faced by OFWs and their families with respect to their tax-exempt status. Many OFWs are having problems getting housing loans, since they are unable to readily prove income and their ability to pay for any borrowing, according to the labor group. Defensor acknowledged that in order to address the problem, the POEA should produce a valid "personal income certificate" for individual OFWs. Like non-resident citizens, Filipinos employed abroad are taxed only on their Philippine-sourced earnings. As tax-exempt individuals, OFWs are not required to file Philippine ITRs, assuming they did not earn any income here, on top of their foreign-sourced earnings. The POEA oversees the deployment of workers lawfully recruited and placed abroad. As such, the agency is in continual touch with licensed recruiters as well as their principals, or the direct employers of OFWs. - GMANews.TV

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