By Corina Oliquino | FilAm Star Correspondent

MANILA – Senate President Pro Tempore Ralph Recto is backing the government’s plan to collect income tax from Chinese workers, saying on July 5 it is the right approach.

“…Before you badger Congress to levy new taxes or raise rates, kindly plug the leaks first,” Recto said in a statement shortly after the Department of Finance announced it would collect taxes from Chinese workers in the on-line gaming industry beginning July, eyeing at least P22 billion in annual income taxes from Chinese and other foreign nationals employed in the country.

“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, citing the “lax” enforcement of policies by the Bureau of Internal Revenue (BIR), Department of Labor and Employment (DOLE) and the Bureau of Immigration (BI) as the likely reason on the influx of Chinese workers.

“Dehado na nga sa West Philippine Sea, pati ba naman sa singilan ng buwis e dehado pa rin ang Pilipinas,” Recto told Rappler, noting Chinese workers in other industries such as construction should also pay income tax.

Moreover, Recto noted Filipino workers and professionals paid P370 billion in income tax in 2017 or 20 percent of the total tax paid, meaning workers contribute P1 for every P5-tax paid.

The Senator’s office also cited an initial BIR count which showed 33,000 foreign workers employed by service providers of 64 offshore gaming operations, all of which are employed by more than 200 service providers in the gaming industry.

Foreign workers database and a no-objection certificate
In a report by Rappler, the BIR and DOLE announced earlier this week the development of a foreign workers database to monitor them and their paying of correct taxes.

BIR Commissioner Caesar Dulay confirmed on July 3, changes to a draft joint memorandum circular on the issuance of work permits to foreigners to include “a provision on setting up the database to effectively pursue our mandate of taxing foreign workers, we need accurate data on foreigners working in the Philippines.”

Meanwhile, Finance Sec. Carlos Dominguez III during the joint meeting said the taskforce for the database also involves the Bureau of Immigration and the Philippine Amusement and Gaming Corporation in a bid to “step up their efforts and come up with creative solutions in tracking the entry and employment of foreign nationals in the country.”

The BIR also sent out 29 notices to several Philippine offshore gaming operators (POGOs) service providers asking them to remit taxes amounting to P4.44 billion.

Last June, DOLE announced a no-objection certificate on all foreign nationals before they will be issued a working permit and visa, which would add up to the new guidelines on the issuance of alien employment permit it issued last May.

“Before the Bureau of Immigration (BI) can issue working permit or visa in the case of the Department of Foreign Affairs (DFA), they have to secure a no objection certification from DOLE,” Sec. Silvestre Bello said, with the Department committed to issue the certificate within three days once the foreign national submits all the necessary documents provided under a joint memorandum circular to be issued by the government.

“The new guidelines also identified 14 categories for the issuance of special work permit for foreign nationals who will work here for a period not exceeding six months,” the Philippine Star reported, with the BIR also requiring foreign nationals working in the country to secure tax identification numbers.

The circular has been approved by concerned government agencies and is just awaiting Duterte’s signature.