OFWs REMITTANCES NOW TAX-EXEMPT, TRAVEL TAX AND AIRPORT FEE NO MORE

The amended Migrant Workers and Overseas Filipinos Act now exempts Ofws or Overseas Filipino Workers from paying documentary stamp tax (DST) on their remittances, travel tax and airport fee.

The law exempts Overseas Filipino Workers and migrant workers from the payment of travel tax, documentary stamp tax or DST and airport fee upon showing of proof of entitlement from the POEA or Philippine Overseas Employment Administration.

According to Section 22 of Republic Act 10022 “The remittances of all OFWs, upon showing the same proof of entitlement by the OFW beneficiary or recipient, shall be exempted from the payment of documentary stamp tax.’’

According to former labor undersecretary and now Nacionalista Party (NP) senatorial bet Susan Ople the scrapping of the DST is very timely because it could help the OFW beneficiaries here recover some of the buying power they lost due to the peso’s surge against the dollar. “Overseas Filipino Workers can now count on some P1.3 billion in extra savings with the abolition of the DST on all their remittances,’’ Ople said, as she cited Department of Finance’s projection at $19 billion worth of remittances this year. The removal of the documentary stamp tax or DST on all funds wired home by OFWs would help drive down money transfer charges, and put more cash in the pockets of those receiving remittance,’’

Before to the passage of the amended Migrant Workers and Overseas Filipinos Act or RA 10022, all money transfers and remittances from abroad and payable in the Philippines, including those wired home by Overseas Filipino Workers were subject to the documentary stamp tax (DST) at a rate of P0.30 for every P200.

An estimated 10 million Filipinos, migrants and contract workers are working abroad. OFWs remit around $17 billion annually and have been the Philippines economic saviors for over three decades already.

Susan Ople stated that local banks and non-bank money transfer agents such as Moneygram International, Inc. and The Western Union Co. collect the documentary stamp tax (DST) before the funds sent home by Overseas Filipino Workers are actually paid out to their beneficiaries or families here. This means that OFWs pay a documentary stamp tax (DST) of P33.27 for every $500 or P22,180 (at $1:P44.36) they send home. The amount is on top of foreign and local bank fees, plus the P0.50 to a dollar margin domestic banks that are allowed when paying out remittances in pesos.

Migrante International believes the Philippine government has had enough from the billions of dollars of OFW remittances it received yearly and it is therefore high time for the government to do the saving.

Exerpts from Mamanglu, Shianee www.mb.com.ph/articles/253203/ofws-now-taxexempt