Western Union to charge 0.15% tax on remittances
July 10, 2008
The good news is that the additional 0.15% tax on all incoming overseas remittances was supposed to start May 30, 2008 but, until now, this has not been implemented.
The bad news is that the collection of this tax will start anytime soon.
Last week when I picked up my Google Adsense earnings from Western Union, they told me that the additional Documentary Stamp Tax (DST) tax on remittances will start “sometime this June.”
The tax will affect all incoming remittances from abroad. The charge is 0.15% of the transaction amount or P1.50 for every P1,000 remittance.
It may not be a lot but Overseas Filipino Workers (OFWs) have the right to complain because it’s still money that could have been enjoyed by their families in the Philippines.
According to Western Union, this tax is not really new but is just an implementation of an old tax regulation, specifically, Section 181 of the 1997 Tax Code and Regulations which states that “a documentary stamp tax shall be imposed on any bill of exchange or order for payment purporting to be drawn in a foreign country but payable in the Philippines.”
That means it will affect all remittances via Western Union coming from an overseas sender — and that includes payments from Google Adsense. Ouch.
Remittances coursed through banks, however, are not subject to the 0.15% tax because they are already collecting this since the tax ruling was approved.
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