(allheadlinenews.com) - The Bureau of Internal Revenue is contemplating the removal of an income tax perk enjoyed by overseas Filipino workers (OFWs) who earn at least $6,000 annually.
The proposal, which is a revival of a similar plan in 2004, would remove the income tax exemption enjoyed by OFWs who meet a minimum salary grade. Those who earn less, such as factory workers and domestic workers, are not included in the plan and would still be exempt from paying local income taxes.
For the plan to push through, Congress will need to amend the National Internal Revenue Code of 1997, which provides that Filipinos who work and derive income from abroad as overseas contract workers are taxable only on income from sources within the Philippines.
The Department of Finance in 2004 withdrew a similar proposal from Congress after OFWs and their families protested. The government had pushed for the plan as part of initiatives to increase national revenues.
In 2006, some eight million overseas Filipinos remitted $12.76 billion, up from $10.69 billion in 2005. The Bangko Sentral ng Pilipinas (Central Bank) credits higher deployment of workers and better remittance channels for the increase. The bank expects remittances to rise to $14.7 billion this year, Business World reports.