Gov’t urged to remove taxes on OFW remittances

MANILA, Philippines - A migrant workers' organization on Thursday appealed to the government for an “economic relief" by removing unnecessary taxes imposed on dollar remittances of overseas Filipino workers.

Maita Santiago, secretary general of the militant group Migrante International, told GMA News that many OFWs and their families are not aware how much taxes the government collects from their remittances.

“Many OFWs have no idea that the government is deducting a hefty percentage from every dollar they are sending home," Santiago said.

The report said banks and remittance centers abroad collect an average $15 to $26 service for every transaction of dollar remittances. This is on top of the bank service charges and documentary stamp tax collected from the remittance once it reaches the Philippines.

The Bureau of Internal Revenue said that in every $1,000 remittance the government collects P61 documentary stamp tax.

Labor Sec. Marianito Roque, also the concurrent administrator of the Overseas Workers Welfare Administration (OWWA), said collecting documentary tax from dollar remittance is in the Internal Revenue Code.

“That has been in existence since 1990s and that is part of the internal revenue code so [banks must comply]," Roque said.

However, Malacañang said it is open to discuss the plea of OFWs.

Mely Tee, whose sister is a maid in Hong Kong, said removing those taxes would mean additional savings to her budget. “I can save a lot. The amount of tax that would be removed could buy a half sack of rice."

Last year, OFW remittances reached $14 billion or $1 billion a month – of which an estimated P62 million goes to documentary stamp tax. - GMANews.TV