Overseas Filipino workers (OFWs) can now enjoy tax and duty free balikbayan boxes as President Aquino signed into law the Customs Modernization and Tariff Act (CMTA) which increases the tax-exempt value of items sent by overseas Filipinos to their families back home.
“Nagpapasalamat po tayo sa ating Pangulo at mga kasamahan sa Senado at sa Mababang Kapulungan na tumulong sa pagpasa ng batas na ito na naglalayong alisan ng buwis ang ating mga OFW na nagpapadala ng balikbayan box at ireporma ang luma at bulok na sistema sa Customs,” said Angara, chairman of the ways and means committee and sponsor of the CMTA.Under the CMTA or Republic Act 10863, the tax exemption ceiling will be increased from the present P10,000 to P150,000.
“With the increase in the values, we lessen the discretion of the Customs officials to inspect goods and collect taxes, thus minimizing cases of corruption and smuggling. Huwag naman sana natin parusahan ang ating mga OFW sa pamamagitan ng pagpataw ng mataas na buwis at sa mga umano’y pangangalkal at pagnanakaw sa mga padala sa loob ng balikbayan boxes,” the lawmaker added.
The law provides that OFWs can send up to three P150,000-worth of tax and duty free balikbayan boxes in a year, given that the goods are not in commercial quantities nor intended for barter, sale or for hire.
On top of the tax and duty free balikbayan boxes, Filipinos, who have stayed in a foreign country for at least 10 years and are returning to the Philippines, will also be granted tax exemption for the personal and household effects, not exceeding P350,000, they will be bringing with them when they return to the country.
As for Filipinos who have lived overseas for at least five years, they will be entitled to tax and duty free personal and household effects amounting to P250,000, while those who have stayed abroad for less than five years can enjoy P150,000 tax-free ceiling.
The CMTA also raises the de minimis value, which refers to the value of tax and duty free goods and the minimum cost of goods required to undergo formal Customs entry, from the present P10 to P10,000.
The senator stressed that to permanently do away with the outdated values, the bill provides for an automatic indexation of the amounts every three years to account for inflation.
RA 10863 generally aims to simplify, modernize and align with global best practices the country’s customs procedures including import clearances and valuations, making the release of goods much faster, regardless of whether you are an individual entrepreneur or a large multinational.
It also mandates the use of information and communications technology and other appropriate applications that speed up not only the inner-workings of Customs, but also make it more transparent.
The CMTA reinforces BOC functions as trade facilitator rather than just being a revenue-generating agency, and imposes higher penalties against smuggling.
“The CMTA aims to overhaul and modernize the bureau which has long been perceived as one of the most corrupt and underperforming government agencies in the country. Kahit si President-elect Rodrigo Duterte ay gusto nang buwagin ang ahensiyang ito. Pero umaasa tayo na sa pamamagitan ng mahigpit na pagpapatupad ng batas na ito at sa tulong ng bagong administrasyong Duterte, magbabago at maisasaayos ang kalakaran ng Customs,” Angara said.#