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New law scraps DST, travel tax, airport fee for migrant workers

Overseas Filipino workers (OFWs) are now exempted from paying documentary stamp tax (DST) on their remittances as well as travel tax and airport fee.
This is contained in the amended Migrant Workers and Overseas Filipinos Act.

The law exempts migrant workers from the payment of travel tax, DST, and airport fee upon showing of proof of entitlement from the Philippine Overseas Employment Administration (POEA).

“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,’’ Section 22 of Republic Act 10022, stated.

Former labor undersecretary and now Nacionalista Party (NP) senatorial bet Susan Ople immediately urged the Department of Labor and Employment (DoLE) and the Department of Finance (DoF) to immediately issue the new law’s implementing guidelines.

“The DoLE and the DoF should promptly issue the new law’s implementing rules and regulations so that OFWs would immediately benefit from reduced remittance charges,’’ Ople said in a statement.

She said that 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.

“OFWs 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 DoF’s projection at $19 billion worth of remittances this year.

“The removal of the 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,’’ she added.

Prior to the passage of RA 10022, all money transfers from abroad and payable in the Philippines, including those wired home by OFWs were subject to the DST at a rate of P0.30 for every P200.

Ople said that local banks and non-bank money transfer agents such as The Western Union Co. and Moneygram International, Inc. collect the DST before the funds sent home by OFWs are actually paid out to their beneficiaries here.

This means that OFWs pay a 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.

Various OFWs and labor groups and even an administration senatoriable had called for the scrapping of the tax imposed on remittances, saying it will severely burden the overseas workers and their families.

The Trade Union Congress of the Philippines (TUCP) had said the government has been raking in money from OFW remittances through the DST, reaching to over P1.3 billion.

Migrante International believes the government has had enough from the billions of dollars of OFW remittances it received yearly.

“OFWs have been the country’s economic saviors for over three decades already; it is therefore high time for the government to do the saving,’’ the group said.

Given the contribution of OFWs in helping keep the economy afloat, Lakas-Kampi-CMD senatorial bet Atty. Raul Lambino also said it is not wise fiscal policy to require DST payment for OFW remittances.

An estimated 10 million Filipinos, migrants and contract workers are working abroad. OFWs remit around $17 billion annually, it was learned

New law scraps DST, travel tax, airport fee for migrant workers
By:SHIANEE MAMANGLU
April 17, 2010, 7:54pm

Filed under: Kwentong OFW, OFW Corner, POEA-Advisory, , , , , ,

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