Overseas Filipino workers and their families in the Philippines may soon no longer have to worry about paying taxes on their balikbayan (personal effects) boxes if their packages are worth less than P150,000.
The Balikbayan Box Law (BBL) that will raise to P150,000 the tax-exempt value of pasalubong (personal gifts) cargo brought into or sent over to the Philippines by overseas Filipinos has been included in the Senate version of the Customs Modernization and Tariff Act (CMTA), according to Senate President Pro Tempore Ralph Recto.
In a statement Recto, who filed Senate Bill No. 2913 also called BBL last August, said the proposed measure has been included in the draft CMTA, now up for second reading in the Upper House.
Recto filed the BBL after a public outcry over a Bureau of Customs (BOC) plan to physically inspect balikbayan boxes revealed outdated Customs regulations, one of which is to tax balikbayan boxes whose contents are worth more than P10,000.
The BBL, Recto said, has been added to a section of the proposed CMTA which defines “conditionally-free and duty-exempt importation.”
Under this section, “residents of the Philippines, Overseas Filipino Workers, other Filipinos while residing abroad or in their return to the Philippines shall be allowed to bring in or send to their families or relatives in the Philippines balikbayan boxes which shall be exempt from duties and taxes.” The total dutiable value of the boxes shall be more than P150,000, the section noted.
The privilege can only be enjoyed “up to three times in a calendar year,” Recto noted.
“This means that an OFW can send two boxes at the same time provided that their total worth is not more than P150,000. That will be counted as one shipment,” Recto explained.
The boxes, however, must contain “personal and household effects only and shall neither be in commercial quantities, nor intended for barter, sale or for hire,” the section further reads.
“This is to prevent senders from abusing this privilege. With this privilege comes the duty to observe the law. And it also comes with penalties so that smugglers won’t take advantage of it,” Recto pointed out.
The bill includes a provision to index the rates to inflation so that it “will not take another quarter-of-a-century to adjust the tax-exempt ceiling for balikbayan boxes,” Recto said.
“Every three years after the effectivity of this Act, the Secretary of Finance, upon recommendation of the Commissioner (of Customs), shall review the value herein stated and shall adjust its present value using the Consumer Price Index as published by the Philippine Statistics Authority,” Recto quoted the provision.
The lawmaker said the “antiquated provision” of slapping a 50% duty on the value of a balikbayan box in excess of P10,000 was set 28 years ago through then President Corazon Aquino’s Executive Order No. 206.
Even BOC Memorandum Circular No. 7990 which ups the maximum value of a tax-exempt balikbayan box to $500 is more than 25 years old, he noted.
Recto said the proposed CMTA also increases to P350,000 the tax-exempt ceiling for “personal and household effects” that a returning resident who had lived abroad for 10 years may ship to the Philippines.
The CMTA has already hurdled third and final reading in the Lower House and awaits second reading in the Senate.
Image courtesy of Stuart Miles at FreeDigitalPhotos.net
