MANILA, Philippines - The Bureau of Internal Revenue (BIR) is now requiring all local banks and non-bank remittance agents to report to the tax bureau money sent through them by overseas Filipinos to monitor the availment of the tax-exempt privilege on OFW remittances.
The BIR has issued Revenue Memorandum Regulation 11-2012, which reiterates that remittances sent by overseas Filipino workers are exempt from documentary stamp tax.
However, the new regulation requires stricter monitoring of remittances sent through banks and non-bank agents as the BIR stressed that recipients must show proof that the money really came from (OFWs). The regulation provides additional requirements for recipients to be able to avail of the tax- exempt privilege.
RR 11-2012, signed by Finance Secretary Cesar Purisima last month, amends RR 1-2011 issued in February last year.
According to the new regulation, the sender or the recipient must show an employment certificate, a valid identification card issued by the Overseas Workers Welfare Administration (OWWA) or an electronic receipt issued by the Philippine Overseas Employment Administration (POEA) to be able to avail of the tax perks.
Remittances coursed through banks and non-bank agents are also entitled to the DST-exempt benefit but that the OFW or the recipient must show proof of entitlement.
“In case of OFWs whose remittances are sent through the banking system, credited to beneficiaries or recipient’s account in the Philippines and withdrawn through an automatic teller machine (ATM) or sent through non-bank money transfer agents, it shall be the responsibility of the OFW to show the valid proof of entitlement when making arrangement for his or her remittance transfers,” the BIR regulation said.
The BIR is also requiring local banks and non-bank money transfer agents to document remittances made by OFWs for monitoring purposes.
The banks and non-bank agents must report to the BIR the proof of entitlement submitted by the recipient or the OFW.
The report must be submitted on a quarterly basis to the Revenue District Office or Audit Division under the Large Taxpayers Service where banks and non-bank money transfer agents are registered.
The BIR is stepping up efforts to boost collections as it is tasked to raise P1.066 trillion this year. - By Iris C. Gonzales