053107: Tax-OFWs plan rejected

NEDA SAYS FAMILIES OF MIGRANT WORKERS ALREADY HIT BY STRONG PESO

By Rommer M. Balaba

Reporter

THE government right now has no intention to tax the incomes derived by Filipinos working abroad, as suggested earlier by a group of economists and business experts, according to a senior official from the National Economic and Development Authority (Neda). “It is not within the planning horizon to tax the earnings overseas Filipino workers. Our so-called heroes of the economy do not deserve another burden,” Dennis M. Arroyo, Neda director for national planning policy, said in an interview. Taxing OFW incomes may further diminish the money received by their families,  Arroyo explained, with the continued strengthening of the local currency versus the dollar. “Besides they are already being hit by a strong peso,” he added. A study from De La Salle University raised the idea of taxing OFW remittances and the proceeds used for propping up the productivity vacuum created by the departure of Filipinos for overseas work. Written by Tereso Tullao, Michael Angelo Cortez and Edward See, the paper said taxing OFW incomes would compensate the country for productivity losses, which is especially true for migrants who attended government-funded state universities and colleges. Up to 1 million Filipino workers leave each year to join the up to 8.5 million other Filipinos currently in over 180 host countries on either a permanent, temporary or irregular basis. Aggregate remittances sent through formal channels reached $12.6 billion last year and are expected to top a record $13 billion this year. As of March, total remittances are up 24 percent to $3.5 billion. “OFW money is behind the strong consumption, retail trade and telecommunications, among other productive activities,” Arroyo said. And in lieu of any policy change on OFW remittances, Arroyo explained the government would rather pursue tax-related administrative reforms and push for the approval of tax bills such as the Simplified Net Income Tax Scheme as well the rationalization of tax incentives.

 

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