MANILA, Philippines—A moderate labor organization on Sunday joined calls for the scrapping of the documentary stamp tax (DST) charged on remittances of overseas Filipino workers using the banking system.
In a statement, the Trade Union Congress of the Philippines (TUCP) said the abolition of the DST would benefit OFWs and their families, particularly those that suffered losses during the onslaught of Tropical Storms “Ondoy” and “Pepeng.”
“It’s one way for the government to help the families of our OFWs, particularly those struggling to rebuild their lives following the recent typhoons,” TUCP secretary general Ernesto Herrera said in a statement.
Herrera said that under the Internal Revenue Code, money transfers from abroad payable in the Philippines are subject to a DST of 30 centavos for every P200 sent through banks.
This means, he said, that OFWs actually pay a tax of P34.85 for every $500 or about P23,230 that they send home. This is on top of the usual foreign and local bank fees and the 50 centavos to a dollar margin that domestic banks are allowed in converting foreign exchange into pesos, he said.
“The amount may not seem much, but if an OFW sends home $500 every month for 12 months, he will have paid P418.20 in stamp taxes alone,” Herrera said.
Herrera estimated that the government collects about P1.2 billion in DST every year from the remittances of OFWs via banks.
OFWs coursed through the banks $16.426 billion in remittances in 2008. From January to August this year, they have sent home via banks $11.3 billion. –Jerome Aning, Philippine Daily Inquirer
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