TUCP urges government to stop OFW remittance tax

MANILA, Philippines – The government was urged yesterday to stop collecting taxes on remittances from overseas Filipino workers.

Ernesto Herrera, Trade Union Congress of the Philippines secretary-general, said this is one way of helping families of OFWs, who are struggling to rebuild their lives following the devastation caused by storm “Ondoy” and typhoon “Pepeng.”

Under the law, money transfers from abroad payable in the Philippines are subject to a rate of 30 centavos for every P200, he added.

Herrera said $500 remitted monthly for 12 months will cost the OFW P418.20 in documentary stamp taxes alone.

“OFWs actually pay a tax of P34.85 for every $500 or P23,230 (at $1:P46.46) that they send home,” he said.

“This is on top of the usual foreign and local bank fees and the P0.50 to a dollar margin that domestic banks are allowed in converting foreign exchange into pesos.”

Herrera said the government collects an estimated P1.2 billion in documentary stamp tax every year from the cash sent home by OFWs via banks.

“This question really is, whether the P1.2 billion is better kept in the government’s pocket, or in the pockets of the families here of our OFWs,” he said.

“We say abolish the stamp tax on the money transfers made by our OFWs, and let their families here keep the money for them to spend.”

Congress recently passed a new law abolishing the 75-centavo documentary stamp tax for every P200 par value of shares of stock sold through the Philippine Stock Exchange benefiting investors engaged in the buying and selling of publicly traded shares of stock.

OFWs sue recruiters

Meanwhile, a group of OFWs who were repatriated a few weeks ago are suing their local recruiters.

The OFWs, recruited to work as construction workers in Maldives, said the recruiters substituted their employment contracts.

They will first mount a protest action before the filing the case before the Philippine Overseas Employment Administration, according to Migrante. – Mayen Jaymalin, Philippine Star