JEDDAH/ RIYADH/MANILA, 12 September 2004 — A proposal by the Philippine Department of Finance (DOF) to reimpose income taxes on overseas Filipinos has met with mixed reactions, some thinking it is another unnecessary burden and others saying it should be done reasonably.

Grace Lardizabal, a househelp in Alkhobar worried that nothing would be left of her meager pay should the tax be reimposed.

“What will be left of my SR600 monthly pay? What I’m sending home its barely even enough,” she said in Filipino.

Virgilio de Jesus, a storeman at Rashid-Abetong, said he receives only a monthly basic salary of SR1,200 a month and his children and grandchildren are staying in his house at the GMA in Cavite.

“If I have to pay income tax it would be impossible for me to meet the requirements of my family, which totally depends on me,” he said.

“It’s unfair for us OFWs because we are earning our income outside our country not from the Philippines and we are not using government services. We are actually helping the economy through every dollar we send home to our families,” added Rudy Dianalan, chairman of the Kasapi Congress, which played a key role in lobbying for the abolition of the income tax on OFWs.

Bioux Manilum, Bisaya president and Riyadh chapter commander of the Order of the Knights of Rizal (OKOR), said he has asked his group members about it but they are against it.

“They would rather pay the $25 OWWA contribution,” said Manilum, who is a maintenance general supervisor at the King Khaled International Airport (KKIA).

He was referring to the fee imposed by the Overseas Workers Welfare Administration (OWWA) everytime an OFW signs a new contract with a foreign employer.

Alex Asuncion, a community leader in Riyadh, wondered what’s wrong with President Gloria Macapagal Arroyo’s administration that it is trying to take back what was given to OFWs by its predecessor.

“That’s why that burden was removed from us because we are already helping our country a lot through our remittances,” he said.

Amid lobbying by OFW groups, Congress enacted a law abolishing the income tax return in 1997, which then President Fidel Ramos signed without hesitation. The law took effect in January 1998.

In Dire Straits

Finance Secretary Juanita Amatong brought up the idea of reimposing the tax on overseas Filipinos on Friday, saying it was time for everyone to share the fiscal burden.

“They (OFWs) are Filipinos, therefore, they have to help in efforts to ease the country’s fiscal problem,” she said.

She said her department was studying a proposal to restore the gross income tax on OFWs, a possible alternative in case Congress failed to pass the main revenue-enhancement measures proposed by the executive department to ease the budget deficit.

She quoted Philippine ambassadors as saying in initial discussions that OFWs had nothing against paying taxes — an indication, she said, that they were willing to do their share to help address the fiscal problem.

‘Make It Reasonable’

Among those who expressed their opinion via e-mail or in interviews with Arab News, many thought some sacrifice was needed on the part of OFWs.

“This looks like another added burden to OFWs but it’s okay provided it goes directly to the government for proper distribution. Personally, I think that with the dwindling state of our economy, it’s about time that we give our share,” said Rudy Carillo, chairman of the OFW Cooperative Council (OFWCC) in Jeddah.

Benny M. Quiambao, president of the Riyadh-based Calabarzon, said: “If the government has to reimpose the collection of taxes among OFWs, it may be understood by OFWs who are in a position to pay because they know the crisis gripping the country at present. But many won’t, so I suggest that payment is according to capacity to pay.”

A restaurant manager in Dammam, Dan Paredes, added. "We know the difficulties of the country at present so that we could help raise revenues but the income tax should be imposed only on those who could afford to pay.”

In Alkhobar, Buddy Alpuerto, building superintendent at the Al Rashed Towers, said he has no objection as long as the tax to be collected is reasonable enough.

“The taxes should not be so high so that they won’t be a burden to us,” he said.

Rashid Fabricante, action officer of the Pusong Mamon Task Force and a member of the e-Lagda advocacy group, said that OFWs fought long and hard for some 15 years for tax exemption.

“To raise the issue of tax reimposition would be defeating the established partnership between the government and OFWs. However, if the government uses its police power to impose taxes, we can’t do anything about it but it should be based on capacity to pay,” said Fabricante who works at Saudi Telecom Company (STC).

Why Punish OFWs?

Others said they were not lacking in a sense of sacrifice but that they don’t want to be made to pay for bad governance.

Hernan Obenita, a secretary at a mining company in the Kingdom, suspected that the government of President Arroyo was getting desperate because it may have used much of the government’s money for electioneering.

“Tiga-sagip o taga-takip ba ang mga OFWs ng mga gago sa gobyerno para huwag silang mapulaan sa kanilang mga tiwaling gawain? (Are we being made again to make up for the irregularities committed by these fools in government?” he asked.

“There was so much money during the election campaign. Where did that money come from if not from the coffers of the government, resulting in the depletion of cash to meet the country’s financial requirements,” another OFW said.

Miguel Bolos, another advocate for OFW rights in Riyadh, said: “Before the BIR (Bureau of Internal Revenue) even cast their glance once again on OFWs for fleecing, they better clean up their acts first,”

He said the proposal to tax proposal appeared to be a “short cut and an easy way out of the problem of sagging tax revenue.”

Manuel Amora, a community leader in the industrial areas also of Riyadh, warned that the idea being floated could backfire on the Philippine economy.

“They must be careful in making such proposals because it is an insult and it could scare us into withholding our remittances,” he said.

“Blaming the low income tax collections on OFWs is a nonsense statement. Why not check and go after those multi-million peso companies in the Philippines who continue to evade paying their taxes?” he added.

Sympathetic Voices

In Manila, opposition Senator Aquilino Pimentel Jr. said taxing the country’s overseas workers are already enduring a lot of sacrifices and add another burden would be unfair.

“OFWs shouldn’t be taxed. They’re putting their lives on the line away from home to support their families,” Pimentel told Arab News.

In a later press statement, he added that the proposed tax is an unnecessary disincentive to overseas Filipinos who already send the bulk of their earnings home, earnings which in turn help the economy grow.

“It’s better that the OFWs and members of their families have money to spend. It is better for them to spend their own money directly, instead of the government spending taxpayers’ money for them,” he added.

Pimentel said “money they send home is spending money that keeps the Philippine economy alive.”

Migrante International said the government should stop blaming Filipinos abroad for the fiscal crisis and poor tax collection at home.

“The annual remittances of overseas Filipinos were more than the combined value of the top five merchandise exports in 2003. The $7.639 billion remitted last year is also almost 100 times the figures of foreign direct investments, almost half the Gross Domestic Product and one-fourth (1/4) of the Gross National Product in 2003,” said Migrante sectoral party chair Connie Bragas-Regalado said.

Regalado, a former OFW based in Hong Kong, recalled that last April, a BIR official even had the temerity to blame overseas Filipinos for the decline in the bureau’s revenue collections.

“The BIR is letting big-time tax evaders like Lucio Tan go unscathed,” she said.