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Saturday, July 22, 2017

OFW Remittance Will Not Be Taxed Under Duterte's Tax Reform Plan

If you are an OFW, or your family relies on OFW remittance, then here's some good news for you! If you are aware of President Duterte's Tax Reform Plan, many OFWs were wondering if their remittances are going to be taxed as some people have speculated on social media. The good news is that Finance Undersecretary Karl Kendrick Chua has confirmed that the proposed Comprehensive Tax Reform Program (CTRP) does not cover remittances from Overseas Filipino Workers since these are money coming from outside the country.  Simply put, the Philippine government has no jurisdiction over such inbound funds. Just to stress, the laws apply only to remittances sent from within the country and, even then, the principal amount itself is not taxed. Only the domestic remittance fees are being charged with value-added tax (VAT).  Economists agree, that the continuing growth of OFW remittances, as well as the local BPO Industry, are a big help in achieving the 6-7% target growth of the Philippines' GDP. Last year, overseas Filipino workers had remitted a total of $28 Billion. Remittances came mainly from the United States, Saudi Arabia, the United Arab Emirates and Singapore.  Finance Secretary Carlos Dominguez III said the CTRP was expected to help reduce the poverty rate in the Philippines from 21.6 percent in 2015 to 14 percent by 2022.  Dominguez said that meant lifting some six million Filipinos out of poverty and helping the country achieve upper middle-income status.





If you are an OFW, or your family relies on OFW remittance, then here's some good news for you! If you are aware of President Duterte's Tax Reform Plan, many OFWs were wondering if their remittances are going to be taxed as some people have speculated on social media. The good news is that Finance Undersecretary Karl Kendrick Chua has confirmed that the proposed Comprehensive Tax Reform Program (CTRP) does not cover remittances from Overseas Filipino Workers since these are money coming from outside the country.

Simply put, the Philippine government has no jurisdiction over such inbound funds. Just to clarify, the laws apply only to remittances sent from within the country and, even then, the principal amount itself is not taxed. Only the domestic remittance fees are being charged with value-added tax (VAT).



Economists agree, that the continuing growth of OFW remittances, as well as the local BPO Industry, are a big help in achieving the 6-7% target growth of the Philippines' GDP. Last year, overseas Filipino workers had remitted a total of $28 Billion. Remittances came mainly from the United States, Saudi Arabia, the United Arab Emirates and Singapore.

Finance Secretary Carlos Dominguez III said the CTRP was expected to help reduce the poverty rate in the Philippines from 21.6 percent in 2015 to 14 percent by 2022.


Dominguez said that meant lifting some six million Filipinos out of poverty and helping the country achieve upper middle-income status.


source: Inquirer



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