RemittancesGateway.org

Finance asks Arroyo to veto law's provision scrapping tax on remittances

Thursday, 04 March 2010 09:31

Source: ABS-CBNNews.com

The Department of Finance (DOF) has asked President Arroyo to veto a provision in the new Migrant Workers Act that exempts money sent home by overseas Filipinos from the documentary stamp tax (DST) as this was just inserted in the bicameral committee's version of the bill.

In a letter submitted to Malacañang, Finance Secretary Margarito Teves said the bicameral committee inserted and approved the provision exempting OFW remittances from the DST without consulting the Finance Department.

 

"The provision on DST exemption of OFW remittances was introduced, inserted and approved at the bicam, where DOF was not invited to attend. Moreover, the inserted DST exemption was never debated on the floor and, as a tax provision, did not seen originate from the House of Representatives," Teves' letter read.

Teves said the DST on remittances should not be considered as burdensome at the rate of 0.15% for this translates only to an equivalent of P7 for every $100 of remittance.

For such minimal benefit per migrant worker, Teves said the proposal taken in the aggregate would cost the government P1 billion in annual DST revenues that could provide support for the economy.

Earlier, Finance Undersecretary Gil Beltran also argued that the DST should not be burdensome to OFWs, who are already enjoying income tax relief and other privileges given to them and their families.

The migrant workers bill is aimed at improving the protection, promotion of welfare and assistance to overseas Filipinos, and was ratified by the Senate and the House of Representatives last January 18.

Aside from the proposed DST exemption, the measure also requires compulsory insurance coverage for agency-hired workers.