The Bureau of Immigration has said it will no longer issue Special Working Permits and Provisional Working Permits to foreigners intending to work in the country—unless the company would submit the withholding tax of their foreign workers.
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Immigration Commissioner Jaime Morente issued the order after the Department of Finance reported that the government was losing at least P3 billion in tax revenues a month from foreign workers in the Philippine offshore gaming operators (Pogo) industry who do not pay personal income taxes.
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Morente said the Bureau would now require foreign applicants to submit additional documents such as proof of payment of withholding tax before they would be issued work permits.
Among the requirements that work permit applicants will submit are: withholding tax; validity of stay as tourists; address, existence, nature of a business, and financial viability of petitioning company; and SEC and other government licenses to operate.
Only authorized BI officers at the main office and alien control officers in the bureau’s field offices might approve or disapprove applicants for SWP and PWP.
Morente said that Filipino workers paid their taxes and that foreign workers were not exempted from paying taxes.
There are more than 100,000 foreign workers in the country, the majority of them employed in the online gaming industry, while some are working in retail stores, construction, and other jobs but do not pay taxes.
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The BI chief said the bureau would coordinate with the Department of Finance, the Bureau of Internal Revenue and the Department of Foreign Affairs in the implementation of the new order.
According to Finance Secretary Carlos Dominguez III, there was no law that exempted foreigners working in the Philippines from paying taxes.
“The law says you work here, you pay tax. Anywhere in the world, it’s the same: you are a foreign worker, an OFW [overseas Filipino worker] in the United States, you pay tax. Why shouldn’t they pay tax here? It’s unfair,” Dominguez said.
A rough calculation by Dominguez showed that with an estimated 100,000 foreign Pogo workers earning about $2,500 a month, each would have to pay about $600 in the 25-percent personal income tax.
“That’s $60 million [over P3 billion] a month that we seem not to be collecting,” Dominguez said.
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