The peso-dollar exchange rate has dropped to P46.46 per $1 from P47.6 to $1 last month, prompting overseas Filipino workers (OFWs) to call on the Philippine government to intervene and shore up their diminishing purchasing power.
The strong showing of the peso against the dollar particularly meant added difficulties for families of OFWs who were hit hard by two successive cyclones, “Ondoy” and “Pepeng.”
The development has prompted an alliance of groups of OFWs in the Middle East, Migrante-Middle East, to call on the government to do an affirmative intervention to help ease the impact of the peso gains against the dollar on the OFWs and their families.
The group said one of the remedial measures that the government could do is to suspend the Bureau of Internal Revenue’s documentary stamp tax on OFW remittances.
“With peso seen to rebound against dollar, suspension of the BIR’s documentary stamp tax, which is 0.05 percent charged for every $200 remitted by OFW, is more than justified as it would ease the difficulties of the OFWs’ families and dependents,” John Leonard Monterona, Migrante-ME regional coordinator said in a statement.
“If the peso continuously gains against dollar, this would diminish the purchasing power of OFWs’ families and dependents and this would mean another round of ‘belt tightening’ and reduce consumption for foods and other basic needs,” he said.
The group said President Arroyo could order the BIR to stop charging the documentary stamp tax on OFW remittances, noting that the agency is under the direct supervision and administrative guidance of the Department of Finance, which is under the Executive branch.
Migrante chapters around the world have been actively campaigning for the removal of the BIR documentary stamp tax on OFWs remittances, claiming that such “would equate as indirect tax imposed by the government on OFWs channeled through remittance service centers.”
The group said the government earns P60 million yearly from the imposition of the BIR’s documentary stamp tax.
Photo credit: Aquino.Paolo
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