BOC to tax packages valued only above P10K
The Bureau of Customs announced Wednesday that starting Oct. 25, items valued at P10,000 and below will no longer be taxable.
The new regulation is embodied in the first Customs Administrative Order (CAO), a salient feature of the Customs Modernization and Tariff Act (CMTA), which has already been signed into law.
CAO No. 02-2016 (RE: IMPORTED GOODS WITH DE MINIMIS VALUE NOT SUBJECT TO DUTIES AND TAXES) was signed by Customs Commissioner Nicanor Faeldon last Sept. 28 and approved by Finance Secretary Carlos Dominquez III. This will implement Section 423 of the CMTA, which provides that “[n]o duties and taxes shall be collected on goods with freight on board (FOB) or free carrier (FCA) value of P10,000.00 or below.”
De minimis pertains to goods for which no duty or tax is collected. Goods that fall under this category are considered of negligible amount and entitled to immediate release.
The old Tariff and Customs Code of the Philippines only provided a de minimis threshold of P10.
“This is good news for Filipinos, who can now fully enjoy their small purchases from other countries. I trust that everyone will strictly abide by the provisions of the CAO,” Commissioner Faeldon said.
Indeed with a perpetually connected world through the internet, online shopping has started to become the norm as well as the importation of clothing, toys, small electronics, and collectible items from other countries.
However, there will still be some specific exclusions from immediate release. Tabacco goods, wines and spirits that fall within the de minimis value will still be subject to taxes as per the National Internal Revenue Code.
The CAO will also grant power to the Secretary of Finance to adjust the de minimis value every three years based on the Consumer Price Index, as published by the Philippine Statistics Authority.
Goods found to violate this CAO shall be disposed of in accordance with Chapter 10, Title XI, of the CMTA. Violations committed by any person, officer or employee shall be penalized in accordance with Title IV of the CMTA and other penal provisions.
The full text for the CAO may be viewed in this link. More information like infographics for stakeholders and the public will be released soon.
BOC will continue with its public consultations, which include stakeholders for drafting succeeding CAOs.
With the new rules official and in place, the next step would be implementing these new regulations as it is common knowledge that corrupt practices in customs are ubiquitous. Alfred Bayle