Senate President Juan Ponce Enrile today urged the Department of Finance to defer the imposition and collection of documentary stamp tax on remittances made by overseas Filipino workers, to help alleviate the plight of families of OFWs affected by typhoons Ondoy and Pepeng.
Enrile called to mind the Tax Reform Act of 1997, where money transfers from abroad payable in the Philippines, particularly the remittances of OFWs, were subjected to a documentary stamp tax (DST) of P0.30 for every P200 sent.
"In view of the latest calamity, we ask the Department of Finance, through the Bureau of Internal Revenue, to defer the imposition and collection of taxes imposed on OFW's remittances," Enrile said.
Enrile added that there are legislative measures filed and pending in the Senate, which seek to exempt money transfers to the Philippines by overseas Filipino workers from the document stamp tax (DST).
In a public hearing conducted last August 11, 2009, of the Committee on Ways and Means, the passage of S. No. 2479 and 3255 was unanimously endorsed by the Bangko Sentral ng Pilipinas, National Tax Research Center (NTRC), the Commission on Filipino Overseas and Overseas Workers Welfare Administration (OWWA).
"The Committee on Ways and Means is ready to report out the bills upon receipt of its house bill counterpart, as mandated under Section 24, Article VI of the 1987 Constitution," Enrile explained further.
Enrile explained that the deferment of the DST will allow affected OFWs to get back on their feet, and at the same time encourage them to course their remittances through legal channels and forex remittance companies.
"Due to the damages caused by typhoon Ondoy and Pepang, there is an imperative need to assist the affected families in order to alleviate their lives and ease some of their financial burden," Enrile said.
He added that "the estimated revenue loss in the collection of taxes from OFW remittances may be recouped from the increased entry of foreign currency since OFWs will now use legal channels to send much needed funds to their loved ones."
Enrile, in addressing the immediate needs of the people, proposed to urge the Department of Finance through the Bureau of Internal Revenue, to defer the imposition and collection of Documentary Stamp Tax on remittances made by registered overseas Filipino workers in order to alleviate the plight of OFW's families affected by typhoons Ondoy and Pepeng.