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Monday, September 13, 2004
Government says it won't tax overseas workers
MANILA -- A spokesman of President Arroyo said Sunday that remittances of overseas Filipino workers (OFWs) would not be subjected to any new taxes, but stressed the need for the swift passage of new tax measures.
Press Secretary Ignacio Bunye said Sunday the taxing of OFW remittances was not among the eight revenue bills the Arroyo administration wanted Congress to enact nor was it discussed at any other time.
Bunye debunked in a radio interview claims of Sen. Aquilino Pimentel that the Department of Finance (DOF) was studying the imposition of a gross income tax equivalent to two percent of the earnings of overseas workers.
Arroyo, however, is calling for the passage of at least one or two of eight tax measures it has proposed to raise revenues and reduce the budget deficit before Congress adjourns on Sept. 25, Bunye said.
He dismissed Sen. Sergio "Serge" Osmeņa's claim that Malacaņang would railroad the passage of the new revenue bills to enable President Arroyo to save face and prove that she deserves the fresh mandate.
The proposed tax measures were already forwarded to Congress and it was up to the Congressional committee on appropriations to debate on the bills, said Bunye.
Bunye noted that Congress had promised it would pass at least one or two measures before the end of the year and Arroyo was banking on that promise.
The promise was reportedly made during a meeting of the Legislative-Executive Development Advisory Council (Ledac) in Malacaņang last month.
Bunye said Arroyo hoped that at least the indexation of sin taxes, "which will have a big impact", would be passed within the year.
Congress is set to adjourn September 25 but has yet to discuss and pass at least one tax measure.
"They legislators know the extent of the problems we face. Between now and their adjournment, they have time to discuss these measures," Bunye said.
"These measures are urgent and what is important is that we get together in finding solutions" to the country's urgent fiscal problems, Bunye said.
He also appealed to lawmakers to prioritize those tax measures that could be passed quickly.
The tax on OFWs was implemented only until 1997 when the Comprehensive Tax Reform Program (CTRP) was enacted and signed into law.
The tax measures already endorsed by Malacaņang to Congress are:
* Increasing to P2 the specific tax on petroleum products,
* Increasing the value-added tax to 12 percent and later to 14 percent,
* Indexing sin taxes,
* Rationalizing government fees and charges,
* Taxing the windfall telecommunications profits,
* Shifting to the gross income tax system, and
* Granting a general tax amnesty.
* The eighth tax bill, the Lateral Attrition Law, has been filed in Congress.
The eight tax measures were intended to generate P80 billion in revenues and reduce the budget deficit.
None of the proposals call for imposing taxes on the remittances of overseas workers.
OFW remittances are exempted from taxation under the Tax Reform Act of 1997 in recognition of their big contribution to the economy. Overseas workers send about US$8 billion annually to their families in the Philippines. (JMR/With OPS)
(September 13, 2004 issue)
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