The Bureau of Customs (BOC) has finally issued the amended order implementing duty- and tax-free importation into the Philippines of consolidated balikbayan (personal effects) boxes.
Customs Administrative Order (CAO) 01-2018 provides new and more detailed documentary requirements for overseas Filipino workers (OFWs) who can avail of the incentives.
The order covers consolidated shipments of balikbayan boxes entered through any port of entry and sent by qualified Filipinos while abroad (QFWAs) to families or relatives in the Philippines.
Balikbayan boxes brought in through means other than consolidated shipments shall be covered under a separate order.
CAO 01-2018 supersedes CAO 05-2016, which was suspended in October 2017 to give way for the crafting of an amended rule following complaints from OFWs on the difficulty of complying with requirements for availment of the duty- and tax-free importation.
CAO 01-2018—which implements Section 800 (g) Chapter 1, Title VIII , and other relevant sections of Republic Act (RA) No. 10863, otherwise known as the Customs Modernization and Tariff Act (CMTA)—was signed by Customs Commissioner Isidro Lapeña on July 23 and Finance Secretary Carlos Dominguez III on August 9.
The order was published in a national newspaper on August 17 and takes effect 30 days after.
Who are QFWAs?
Under the new CAO, QFWAs refer to:
- Non-resident Filipinos, defined as Filipinos who have established permanent residency abroad but have retained Filipino citizenship, whether or not they have availed of the benefits under RA No. 9225 or the Citizenship Retention and Re-acquisition Act of 2003;
- OFWs who are valid holders of passports issued by the Department of Foreign Affairs and who are certified by the Department of Labor and Employment or Philippine Overseas Employment Administration for overseas employment purposes; or,
- Resident Filipino citizens who temporarily stay abroad, who may include holders of a student visa, investor’s visa, tourist visa, and other similar visas which allow them to establish temporary stay abroad.
CAO 01-2018 states that QFWAs are allowed to send to their families or relatives in the Philippines balikbayan boxes which shall be exempt from the payment of duties and taxes for up to three times in a calendar year. These balikbayan boxes include accompanied or unaccompanied baggage as passengers. A shipment that is more than the de minimis value of P10,000 is be automatically considered as one availment.
Balikbayan boxes shall contain personal and household effects only and shall neither be in commercial quantities nor intended for barter, sale, or hire, and the total FCA (free carrier) value for all balikbayan boxes per sender in any calendar year shall not exceed P150,000.
Duty- and tax-free importation of balikbayan boxes under CAO 01-2018 is limited to QFWAs, the new rule declares. Sole proprietorships and juridical entities such as cooperatives, corporations, and partnerships sending balikbayan boxes are not qualified to avail of the privilege under CAO 01-2018.
The processing charge for availing of tax and duty exemption under Section 800 (g) has been lowered to P125 (including customs documentary stamp of P15 and legal research fee of P10), to be collected per house bill of lading (B/L)/house air waybill. Previously under CAO 05-2016, the processing fee was P250.
More detailed requirements
Among the new documentary requirements for QFWAs under CAO 01-2018 are a photocopy of permanent resident ID or equivalent document in other countries (e.g. green card, IQAMA); Overseas Employment Certificate/OWWA Card; work permit; and unified government ID issued by DOLE, and any other equivalent document (except birth certificate).
As with CAO 05-2016, QFWAs under CAO 01-2018 are required to provide a photocopy of any documents containing the QFWA’s citizenship, full name, date and place of birth, including pertinent page of the Philippine passport with personal information; or in the case of dual Filipino citizenship, photocopy of foreign passport with personal information.
They will also have to provide a invoice, receipt, or equivalent document covering the goods contained in the balikbayan box, if available. In addition, they will have to accomplish, sign, and submit an information sheet to serve as packing list of the balikbayan box. The information sheet will be attached in the corresponding customs memorandum order that will implement CAO 01-2018.
The sender of the balikbayan box shall submit the required documents to the consolidator, who shall then transmit the information sheet and supporting documents in a secure electronic format before arrival of the goods in the Philippines within the prescribed period.
Deconsolidators or freight forwarders, which will still have to be registered with BOC, shall transmit the information sheet and supporting documents for sea shipments within 24 hours prior to arrival for those with three-day shipping time; 48 hours prior to arrival for seven-day shipping time; and 10 days prior to arrival for those coming from America, Europe, the Middle East, and other parts of the world that do not fall under the three- and seven-day shipping time.
For balikbayan boxes carried by aircraft, submission must be one hour before arrival for those coming from Asia and six hours prior to arrival for those coming from other countries.
Smuggling and penalties
Sanctions under CAO 01-2018 remain the same as those under CAO 05-2016, except that for the deconsolidator and all other participants who use the duty- and tax-free privilege of balikbayan boxes as conduit for smuggling or other fraud against customs, the sanctions now include imposing fines and penalties as provided under Section 1401 (Unlawful Importation or Exportation) of the CMTA.
This replaces the payment of P300,000 as administrative fee under CAO 05-2016. – Roumina Pablo