Connecting Buyers and Sellers of Philippine Real Estate
Taxing Money Transfers to the Philippines
For quite some time now I have been periodically sending money to some of my in-laws to the Philippines for medical emergencies.
Just two months ago I sent php 5,000 to Manila to help my wife's younger sister to pay for medical expenses. She has cancer and owes almost php 250,000 at the moment.
Then, a few days ago, I sent another php 25,000 to her via Western Union. However, when her husband went to Western Union in Manila to pick up this money, contrary to previous practices and experiences, they took out approximately php 300 as a "tax."
This has never happened to previous experiences of money transfers to the Philippines. When I contacted Western Union in the United States to file a criminal complaint (I assumed I was dealing with a form of embezzlement), I was informed by a representative of Western Union that, since July 1, 2008, there is a new law to tax all money transfers.
This is interesting. When my wife and I contacted our Filipino friends in this area of the United States, none of them reported such an experience. One woman, who has sent approximately php 20,000 to the Philippines every month for the last several years , has never experienced a tax on the receiving end of her money transfers.
Even at this moment, my wife is on the telephone talking to her friend from Cebu who simply doesn't believe there is such a tax.
Can anyone provide any insight on this subject? I am receiving a battery of contradictory advice and information, somewhat analogous to artillery bombardment.
Respectfully,
Alvah Buckmore, Jr.,
Just two months ago I sent php 5,000 to Manila to help my wife's younger sister to pay for medical expenses. She has cancer and owes almost php 250,000 at the moment.
Then, a few days ago, I sent another php 25,000 to her via Western Union. However, when her husband went to Western Union in Manila to pick up this money, contrary to previous practices and experiences, they took out approximately php 300 as a "tax."
This has never happened to previous experiences of money transfers to the Philippines. When I contacted Western Union in the United States to file a criminal complaint (I assumed I was dealing with a form of embezzlement), I was informed by a representative of Western Union that, since July 1, 2008, there is a new law to tax all money transfers.
This is interesting. When my wife and I contacted our Filipino friends in this area of the United States, none of them reported such an experience. One woman, who has sent approximately php 20,000 to the Philippines every month for the last several years , has never experienced a tax on the receiving end of her money transfers.
Even at this moment, my wife is on the telephone talking to her friend from Cebu who simply doesn't believe there is such a tax.
Can anyone provide any insight on this subject? I am receiving a battery of contradictory advice and information, somewhat analogous to artillery bombardment.
Respectfully,
Alvah Buckmore, Jr.,
Replies to This Discussion
-
Permalink Reply by Realtor® Anna Nisperos on -
Hi Alvah,
I contacted the main Western Union Customer Service here at +632 888-1200 and talked with Operator # 081. He was very informative. The tax you referred to is a Documentary Tax that was passed and enacted in July or August 2008 on International Money Transfers. The rate charged is 0.15% for every $100 USD, or Php 1,000 of the principle amount sent depending on if you sent it in Dollars or Pesos.
He also stated that they do have alot of their branches (there are thousands located in pawnshops, sari-sari stores, etc) that still don't know about this tax and fail to charge it when the recipient picks up the money. However, Western Union then charges the Branch for the tax and that is when they realize their mistake and start charging it so it doesn't come out of their pockets.
I hope this was helpful sir,
Anna
-
Permalink Reply by Mike on -
Wow! I was not aware of this bright scheme to steal from the people who keep the Philippine economy afloat.
Here's what we get for paying taxes:
1. Substandard infrastructure (just look at the recent floods!)
2. Lack of decent housing
3. Failing public school system
4. High unemployment and underemployment
5. Adequate medical care only for the rich
6. Plutonomy (few families own most of the wealth)
7. Corrupt and inefficient government
8. Widespread poverty and hunger
9. Too many broken families due to migration
10. Widespread crime and human abuse
Wake up Filipinos! Either we are the stupidest people on earth or we simply lost the ability to fight for our rights.
-
Permalink Reply by Alvah Buckmore on
-
Dear Mike:
I have just finished speaking to the international operator for Western Union after several minutes of frustration trying to work with their multi-level, menu-driven answering machine with its unintelligent artificial intelligence operator going into a continuous loop and without the option I needed to get hold of a "real person."
She confirmed the existence of this "tax" but made an error when she reported it to be 15 percent.
I asked her if there were other countries taxing money transfers. Initially, I had some serious problems understanding her. Her female voice operates on the high-frequency end of the human audio frequency range and the telephone system her company uses use a band-pass filter that cuts off anywhere from 1/3 to 1/2 of her voice that made it most difficult for me to have had understood her. The filter, of course, has the purpose of reducing noise but wasn't really designed for a human female voice operating in that high-frequency range.
Then, another problem occurred. It seems the software database management system the company uses will not easily allow any person to research my question. She had to manually write out each country in a box to determine whether or not it charges a tax on money transfers.
She tried several countries, such as Pakistan, Canada and England. They do not charge a tax. However, at least one other countries does: -- Aruba in the Caribbean. She could find no country that charges such a tax.
Respectfully,
Alvah Buckmore, Jr.,
-
-
Dear Anna:
Thank you for this information. That is precisely the same thing said to me two days ago by a representative of Western Union in the United States.
For the life of me, I can not understand the validity of taxing a transfer of money from one person to another person. That simply doesn't make sense. There is no "capital gain" or any kind of profit in such a transaction. It fact, it sounds suspicious to me as if some government official had discovered a new way of increasing revenue without working for it.
It seems to be a very heavy-handed form to increase revenue. It can only discourage people from sending money back home to help their in-laws and family relatives.
My wife's cousin, who lives a few miles from here and married to one of my best friends, reported they have learned an easier way of sending money to the Philippines.
Her husband writes out a personal check to a family member in the Philippines and sends it via Global Priority Mail. That takes about 15 days to arrive as I have learned from personal experience. But it is reliable, unlike the more conventional First Class mail, which all too often disappears.
Then, upon arrival, the family member takes it to his personal bank to convert the American dollars into Filipino pesos. There is no fee or tax.
Do you have any personal experience or knowledge of this method of sending money to the Philippines? My wife has gone "ballistic" over this new "tax." By Filipino standards, she has reminded me on several occasions, php 300 is a lot of money. In the United States, it would buy a pack of cigarettes or two loafs of bread! But, in the Philippines, it would support a whole family for one or two days.
Respectfully,
Alvah Buckmore, Jr.,
-
Permalink Reply by Mike on
-
Hi Alvah,
The concept is simple. The corrupt Philippine government knew that overseas Filipinos don't have a choice but to send money to their families in the Philippines. Why not tax them and make sure the jobless Filipinos left behind in the Philippines remain dependent on money coming in from abroad?
Like you said, 300 pesos is a lot. A gallon of ice cream in the Philippines probably cost more than the minumum wage. I think the minimum wage is around 350 pesos a day. So you need to work more than one day just to buy ice cream. That is if the employer will pay you the minimum wage.
Perhaps the Philippine government is also betting that overseas Filipinos will never object to it. Maybe they are right. So let's all work to death and pay this tax.
About
© 2010 Created by Mike.
Powered by 
.
