MANILA, Philippines — Overseas Filipino workers in Sri Lanka, Kuwait, Qatar, and Turkey will not benefit from the treaties against double taxation being pushed for ratification by the Department of Foreign Affairs, a migrant workers’ group said Thursday.
According to the Center for Migrant Advocacy, which attended the Senate hearing on the matter, OFWs in these countries are already exempt from taxation on income earned from overseas employment.
The Senate needs to ratify the conventions for the avoidance of double taxation and the prevention of fiscal evasion With respect to taxes on income with these countries before they become enforceable.
OFWs in Sri Lanka, Kuwait, Qatar, Turkey won’t benefit from double taxation treaties — NGO
CMA executive director Ellene Sana said these bilateral agreements seem to benefit foreign companies engaged in business in the Philippines more than OFWs in the four countries.
“CMA is concerned that these agreements do not in fact benefit OFWs in respect to taxation on income. OFWs are already exempt from taxation on income earned from overseas employment and the proposed agreements do not offer additional benefits to OFWs. Without concrete examples of how the agreements and conventions will benefit OFWs and their families, CMA does not see how their benefits extend beyond bringing foreign direct investment into the country,” the organization said in a position paper submitted to the senate committee on foreign relations.
At the same time, Sana asked to be clarified how these agreements will benefit OFWs, saying the treaties afford investors from these countries “significant tax breaks.”
“Considering that companies and enterprises in the Philippines are already afforded significant tax breaks, the necessity of these additional tax breaks is questionable,” CMA said, citing among others the tax breaks that companies registered with the Philippine Economic Zone Authority (PEZA) already enjoy.
CMA was the only NGO present in the meeting. Representatives from the Department of Foreign Affairs, Bureau of Internal Revenue, and Department of Finance also attended the hearing, which was suspended because the resource persons from the government who are strongly supporting the immediate ratifications of these bilaterals were not able to provide the committee with substantial information in more concrete terms on how exactly the country and Filipinos, particularly OFWs, will benefit from these treaties.