BIR to collect foreign workers’ unpaid income taxes

THE Bureau of Internal Revenue (BIR) will start collecting from foreign workers this month billions of pesos in unpaid income taxes, Finance Secretary Carlos Dominguez 3rd said on Monday.

“I…just talked to the BIR last week and they said they [were ready] to start [collecting] foreign workers’ (unpaid income taxes),” he told reporters on the sidelines of Pre-State of the Nation Address (SONA) Economic and Infrastructure Forum” at the Philippine International Convention Center in Pasay.

Asked for a timeline, Dominguez answered that the tax bureau would begin “making the collections in July.”

Most of these foreign workers, he said, are from the Philippine offshore gaming operators (POGO) industry, to which the government is losing about P2 billion a month for every 100,000 foreign workers.

At P2 billion a month, the amount of taxes to be collected from the industry would hit P24 billion a year — a revenue source that was non-existent some four of five years ago, before President Rodrigo Duterte handed over control of these POGOs to the state-run Philippine Amusement and Gaming Corp. (Pagcor).

Earlier, the tax bureau said foreigners and nonresident aliens planning to work in the country must secure their taxpayer identification number (TIN) after estimates showed that the government was losing billions in income taxes from unregistered foreign workers.

This followed a joint guideline signed by the BIR with the Labor and Justice departments and the Bureau of Immigration requiring these workers to secure a TIN before they can secure a special working or alien employment permit.

The BIR said it matched the list of foreigners hired by local companies with records provided by government agencies, which showed big discrepancies on the number of foreigners employed and reported by them to the bureau.

This prompted the BIR to issue batches of notices requiring these employers to pay withholding taxes of P4.44 billion.

“Calls have been made for a public inquiry into the proliferation of foreign workers in the country,” the bureau said.

After consolidating data from various agencies, a Department of Finance-led task force has come up with an initial list of some 138,000 foreigners, 54,241 of whom have been given alien employment permits and another 83,760 holding special working permits.

Assuming that each foreign worker earns an average of $1,500 a month and is taxed at 25 percent of his or her gross income, the Finance department came up with a rough estimate of P32 billion a year in income taxes to be collected.

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