MANILA, Philippines (The Adobo Chronicles® ) – It seems like the Philippine government has waged an all-out war against its own citizens — especially overseas Filipino workers (OFW) and their families.
First, the Bureau of Customs announced new rules on balikbayan boxes, including opening them for inspection when they arrive at the Philippine port of entry. (Balikbayan boxes are those corrugated boxes used by OFWs to ship goods and gifts to their loved ones in the Philippines. Until recently balikbayan shipments have been tax-free. )
Today, Commissioner Kim Henares of the Bureau of Internal Revenue (BIR) announced that dollar remittances from OFWs will be subject to a 35 percent ‘gift tax.’
The Philippines ranks as the fourth biggest recipient of remittances worldwide with an estimated $24-billion inflow annually, according to a World Bank (WB) study. Remittances accounted for 12 percent of the Philippines’ Gross Domestic Product (GDP) the report said.
The Philippines trailed India , China and Mexico in terms of remittances received.
Henares said that the BIR is always looking for ways to earn tax revenue in order to sustain the Aquino administration’s anti-corruption policy of ‘Daang Matuwid’ (straight path).
“Strictly speaking, dollar remittances would be considered income for Filipino families and individuals on the receiving end of the money and should therefore be subjext to tax,” Henares said.
Updating: Henares Responds