Recto: All Chinese workers in PH must pay taxes

MANILA, Philippines – Senate President Pro Tempore Ralph Recto on Friday, July 5, backed the government plan to collect income tax from Chinese workers.

“That’s the right approach. Before you badger Congress to levy new taxes or raise rates, kindly plug the leaks first,” Recto said in a statement on Friday, after the Department of Finance announced it would collect income taxes from Chinese workers in the online gaming industry beginning July.

The senator said the influx of Chinese workers in the Philippines might be due to the “lax” enforcement of policies on foreign labor, allowing the latter to skirt rules of the Bureau of Internal Revenue (BIR), Department of Labor and Employment (DOLE), and the Bureau of Immigration.

“The BIR can’t be strict on Filipinos when it comes to paying taxes, by withholding these at source, while allowing foreign nationals a free pass,” Recto said.

“Dehado na nga sa West Philippine Sea, pati ba naman sa singilan ng buwis e dehado pa rin ang Pilipinas (We’re already at a disadvantage at the West Philippine Sea, should the Philippines still be on the losing end when it comes to tax payment)?” he added.

Recto said Chinese workers in other industries in the country, such as construction, should also pay income tax.

The senator said Filipino workers and professionals paid P370 billion in income tax in 2017 or 20% of the total tax paid. This means that “for every P5-tax paid, P1  comes from individual income earners,” he added.

 The DOF earlier said it eyed at least P22 billion in annual income taxes from Chinese and other foreign nationals employed in Philippine offshore gaming operations.

The BIR and DOLE announced earlier this week that it was developing a foreign workers database to monitor them and ensure they're paying the correct taxes.

Recto's office cited an initial BIR count that showed 33,000 foreign workers employed by service providers of 64 offshore gaming operations. There are more than 200 service providers of offshore gaming operatons in the country. (READ: [ANALYSIS] Why the influx of Chinese in the Philippines?