Lacson Bill Exempts OFW Remittances from Documentary Stamp Tax
May 21, 2009
Citing the contributions of overseas Filipino workers to the economy, Sen. Panfilo M. Lacson sought to ease their burden by exempting them from the documentary stamp tax (DST).
Lacson, chairman of the Senate ways and means committee, filed Senate Bill 3255, exempting from the DST money transfers to the Philippines from OFWs.
“In recognition and solicitation of the OFWs’ sustained contribution to the economic growth of our country particularly during these difficult times, immediate approval of this bill is earnestly sought,” Lacson said.
Besides, he pointed out the share of the DST on OFW remittances is a relatively negligible 3.4 percent of the total DST collection of the Bureau of Internal Revenue.
The revenue loss can be easily recovered through the increased inflow of currency coming from OFW remittances coursed through banks and foreign exchange companies, he added.
Lacson lamented the DST – along with other charges slapped by remittance companies – have prompted some OFWs to send money to their loved ones through the informal sector.
He cited figures from the Bangko Sentral ng Pilipinas indicating charges by remittance firms amount to $15 to 26 per $200, or P720 to P1,248per P9,600 at an exchange rate of P48 to $1.
“No wonder that in 2006, for example, the Bangko Sentral ng Pilipinas calculated that five percent of OFW remittances were coursed through the informal channels,” he said.
But under the bill, an OFW can be exempt from paying the DST only if he or she is “duly registered with the Philippine Overseas Employment Agency.”
The bill also stipulates that the OFW sending the money transfer must present a government-issued document as evidence of his or her being an OFW.