OFWs, taxes and OWWA

THE RECENT admission by the Department of Finance that the Philippine government was thinking of taxing overseas Filipino workers again caused a flood of outrage and disgust from OFWs and groups advocating their cause. Migrante, the advocacy group for migrant workers, was especially caustic, saying, "Both the dollar remittances and government fees on OFWs help keep the economy afloat. How can the administration even think that OFWs are not helping the country? We reiterate that President Gloria Macapagal-Arroyo and her lackeys brought the country to this fiscal crisis."

Connie Bragas-Regalado, the chairperson of Migrante, pointed out that the annual remittances of OFWs of 7.639 billion dollars last year were almost 100 times the figure of direct foreign investment, almost half the gross domestic product, and one-fourth the gross national product in 2003.

OFWs were exempted from the two- percent income tax that they previously paid when then-president Fidel Ramos signed into law the exemption in 1997. The OFW tax exemption was the brainchild of House Speaker Jose de Venecia. According to a Philippine embassy official in Riyadh, who asked for anonymity, the Philippine government collected only $1-2 million a year from OFWs in Saudi Arabia, which would hardly make a dent in the nation's huge debt. Not only that, but the Bureau of Internal Revenue got an OFW compliance rate of only 56 percent from 1992 to 1996, according to Representative Joey Salceda.

Nevertheless, there are reportedly some patriotic OFWs who are ready to pay taxes if asked to do so. The reasoning is that if OFWs clamored and got the right to vote in national elections while abroad, they should also be willing to do their share to help the government raise revenue through paying income tax.

While the tax would be applied only to those making more than a certain minimum salary a month, and would be only two percent, many OFWs resent the government's taking any bite out of their income, especially after the new Omnibus Policies of the Overseas Workers Welfare Administration (OWWA) were implemented last year.

Under these new policies, all OFWs were forced to pay a mandatory 25-dollar membership fee to OWWA, and said that if an OFW ran away from his employer while abroad, he wouldn't be covered by OWWA's repatriation and medical assistance coverage.

Migrante is holding a protest outside OWWA headquarters in Manila this Saturday to mark the first anniversary of the Omnibus Policies, and to call for them to be scrapped.

It is interesting to note, that after President Arroyo said she was giving the leadership of the OWWA and the Philippine Overseas Employment Agency (POEA) to Vice President Noli de Castro, the Vice President on Sept. 4 quietly handed back the leadership of both agencies to the President, claiming he was too busy with other duties to take care of the OWWA and the POEA.

Now that Mariano Duque, a veteran government bureaucrat, has been appointed head of the OWWA, OFWs can only hope that the Omnibus Policies are scrapped and that more

OFW-friendly policies are instituted for managing the six-billion-peso OWWA fund.

Meanwhile, the only bright news on the horizon for OFWs in Saudi Arabia was the announcement this week that housemaids are going to be covered by the new labor law that the Shoura Council is finalizing.

Up to now, all domestic helpers were excluded from the labor law, meaning any grievances against employers cannot be taken to labor courts for redress. It has been a longtime demand that Saudi Arabia extend the protection afforded by the labor law to maids, and it seems that it is within reach now. This should go a long way to helping abused maids get speedier resolutions to claims from employers who withhold their salaries and force them to work long hours.

Comments or questions? E-mail the author at: rasheed@arabnews.com