Making sure foreign workers are taxed

By: John Carlo Tria

THE reality of the thousands of foreign workers setting up in the country, many doing offshore gaming or Philippine Offshore Gaming Operations (POGO) is upon us.

We see them in malls and in many of our public spaces, use our road systems and infrastructure such as hotels. It’s about time they pay the right taxes as they use many of the same public facilities we use.

Since they make much more than many of our own workers, it is but right that we make sure they are taxed properly.

With this, the Bureau of Internal Revenue (BIR) and the Department of Labor and Employment (DOLE) are jointly developing an interagency database of foreign nationals working in the country. This will make sure that they pay the correct amount of taxes to the government.

In a statement, BIR Commissioner Caesar Dulay reported to DOF Secretary Carlos Dominguez that a draft joint memorandum circular (MC) is being crafted with the DOLE on the issuance of work permits to foreigners to include a provision on setting up the database.

This will allow effective monitoring of their incomes so that they are properly taxed as their income rises or if they move to other POGO firms.

BIR Commissioner Dulay told Secretary Dominguez during the Execom meeting that the DOLE had invited the BIR to a meeting to discuss the joint MC on the issuance of work permits to foreign nationals. The database will be administered by the DOLE.

Secretary Dominguez for this part said that while the government is currently focusing on POGOs, the BIR’s mission to ensure that taxes are properly collected cover all foreign nationals working in the Philippines. These include many of the engineers and technicians working in our tech industries and construction companies.

This being the case, the BIR has sent out 29 letter-notices to several POGO service providers telling them to remit the taxes due them as withholding agents in the amount of P4.44 billion.

This is a shot in the arm of our revenue generation efforts and will be used to fund our ambitious infrastructure program.

With the removal of withholding taxes for almost 98% of all Filipino taxpayers via the TRAIN Law, the revenue from foreign workers is a welcome addition to our revenue generation efforts, which have been improving over the last two years.

In recent months following the April 15 tax deadline, which have breached all time collection highs and have now benefited from the more timely remittance of dividends from Government owned and Controlled Corporations.

Our Department of Finance deserves some congratulations.