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OFWs to protest against VAT hike on remittance fees

24 February 2017

By Vir B. Lumicao

A militant Filipino workers’ group in Hong Kong is set to lead a big protest rally on March 5 against moves by the Duterte government to increase value-added tax on remittance fees, which they say would ultimately add to their burden.

Eman Villanueva, Bayan Hong Kong & Macau chairman, said in an interview with The SUN that the rally, to be timed with International Women’s Day, would combine the VAT hike issue with their ongoing protest against the OEC and the P550 terminal fee.

“Ang matindi naming tinututulan kasi diyan, ang kanilang tax reform package ay nakatuon sa pagre-raise ng tax revenue mula sa mga ordinaryong mamamayan eh, hindi sa business, kaya talagang papasanin ng mga tao iyan,” Villanueva.

Villanueva said migrant groups in Hong Kong and Macau are now preparing for the planned Mar 5 mass action that will start with a march to the government complex on Tamar to call for better wages and fixed working hours for migrant domestic workers.

The march will then move to Chater where the VAT issue will be added to the two other main issues of wage hikes and shorter working hours, he said.

He said the plan to raise the VAT on remittance fees to 12% is part of the reform package that President Rodrigo Duterte’s economic team is cooking up.

The first part of the tax reform proposal or House Bill No. 4774 was submitted by Finance Secretary Carlos Dominguez III to both houses of Congress on Sept 26 last year.

Government press statements said the first of four packages of reforms includes the reduction of the personal income tax rate from 32% to 25%, and the reduction of the coverage of VAT exemptions.
The package also aims to raise fuel excise tax, revamp the excise on cars with exemptions for buses, trucks, cargo vans, jeeps, jeepney substitutes and special purpose vehicles.

The plan to raise the VAT on remittance fees, was however, the one the drew the most flak from overseas Filipino workers.

“Kahit pa sinasabi nilang i-impose nila ito sa remittance fee at hindi necessarily doon sa amount of the remitted money, still ipapasa naman iyan ng mga bangko eh, hindi naman nila ia-absorb iyan,” Villanueva said.

The migrant leader said the tax reform package includes the lifting of tax and VAT exemptions on certain basic goods, such as medicines for rare diseases, as well as VAT exemptions on purchases by senior citizens.

At the same time, the tax reform would raise duties on oil, potentially triggering a “domino effect” because power plants, industries and transports rely on crude oil, so prices of all goods and services would also go up, Villanueva said.

“Kapag tinamaan si oil, tataas si pamasahe, tataas si kuryente, kasi yung ating mga power generators, oil ang (ginagamit), babawiin nila yun siyempre. In the end, sabi nga namin, iyang mga increase na iyan sino ang sasalo kundi ang mga OFW, dahil lahat ng mga increases na iyan ay sasaluhin ng mga dependents ng OFWs,” he said.

Villanueva said that ultimately, all the new taxes would be borne by OFWs because they are the breadwinners, he said.
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