Defy stamp tax collection on remittances

Press Release
18 August 2008

Defy stamp tax collection on remittances, money transfer firms urge by OFWs and families

An alliance of overseas Filipino workers’ organizations based in the Middle East today urges remittance firms which are mandated by the government to charged 0.15% on every remittance sent by OFWs abroad as per the proviso in the Tax Reform Act of 1997.

“We are urging Western Union Co. and other money transfer firms to defy the collection of documentary stamp tax (DST) on OFW remittances as an act of good will in the performance of its company’s social responsibility to OFWs and their families,” said John Leonard Monterona, Migrante Middle East regional coordinator.

Migrante ME said that though Western Union and other money transfer companies are mandated by law to collect 0.15% on every OFW remittance, as a matter on internal policy, it could consider not doing so in the performance of its company’s social responsibility to OFWs, thus easing the burden of OFWs and their families in time of economic crisis.

“Money transfer companies like Western Union should not allow the government to encroach its operations and thus use them as a channel to collect more taxes on OFWs. It’s like OFWs are the cows which Western Union is told by the government to milk until they bleed dry,” Monterona averred.

Migrante ME deplores the Arroyo administration that never contented and never ends up on imposing new taxes and additional fees that adds up to the worsening situation of OFWs and their families.

“The Arroyo regime is “over-killing” OFWs and their families. She said she cares for OFWs, but what her government doing is a lot more of tax impositions and exactions; even making OFWs huge remittances a collateral for more loans from International banks and financial institutions such as the IMF-WB and ADB,” Monterona said.

On 2006, OFW remittance posted more than double the total allotment for the government’s external debt service, five times (5x) more than Foreign Direct Investments (FDI), twenty-two (22x) time higher than the total Overseas Development Aid (ODA), and even more than a half of Gross International Reserves.

Not contented with the above benefits from OFW remittances, the Arroyo regime imposed a 0.15% Documentary Stamp Tax on every remittance transaction.

This would mean a deduction of P12.48 on every US$200 remittance; on a US$1 billion remittance monthly, the government is earning US$1.5 million or P62 million.

Migrante chapters around the world along with millions of OFWs are demanding to the Arroyo administration to scrap remittances fees and stamp tax by launching a signature campaign early this month.

Migrante lambasted the Arroyo administration whose only reply to the proposal to scrap remittances fess is that “it could be studied”.

“Malacanang’s reply to the demand of OFWs and their families to scarp remittance fees is nothing but just a word to pacify the growing discontent of OFWs around the world against the most anti-OFW Arroyo regime,” Monterona averred.

“This grave insensitivity of the Arroyo regime on the worsening economic plight of OFW families, who are basically families of workers and farmers, are pushing OFWs around the world to collectively speak and act on its behalf,” Monterona ended.

Migrante chapters and member-organizations from around the world along with other migrants from all over the world will gather in Manila on October 28-30, 2008 and will speak for themselves when the intergovernmental Global Forum on Migration and Development (GFMD) holds its second session to discuss about issues surrounding migration and development.

Migrante and migrant workers’ organizations will challenge participating governments to unmask the anti-migrant agenda of GFMD. (end). # # #

For reference:
John Leonard Monterona
Migrante Middle East regional coordinator
Mobile No.: 00966 564 97 8012