The tax-exempt value of pasalubong cargo brought in or sent by Filipinos overseas was raised to P150,000 with the passage of the Customs Modernization and Tariff Act, said Senate President Pro Tempore Ralph Recto.
Section 800 of the proposed CMTA provides that “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, “ Recto said,
The “total dutiable value” of the boxes shall not exceed P150,000. He said the privilege can only be enjoyed “up to three times in a calendar year,” Recto said, quoting the proposed law.
“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 said.
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 said 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 explained.
Senator Ferdinand “Bongbong” R. Marcos Jr. welcomed the tax exemption for balikbayan boxes of OFWs as he expressed hope the bicameral conference committee will meet soon to speed up the process of the bill’s signing into law.
“Finally we have given back our OFWs a concrete manifestation that we recognize them as modern day heroes for their sacrifices and significant contributions to our economy, instead of merely paying them lip-service,” said Marcos.
Earlier, Marcos opposed the random inspection policy implemented last year by the Bureau of Customs, which included opening of balikbayan boxes suspected of containing smuggled goods.
“If the bicameral conference committee can work fast to harmonize the House and the Senate version our OFWs will enjoy the benefits of this law very soon. I just hope the President won’t veto the tax exemption for balikbayan boxes as he did with the increase in SSS [Social Security System] pension,” said Marcos.
The bill, approved on third reading in the Senate, also includes a provision indexing 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.
Although the provision on the tax treatment of balikbayan boxes is but one of the many in the 311-page bill, “it is one that is most awaited by Overseas Filipino Workers [OFWs],” Recto said.
“And we can now report to them that the Balikbayan Box Law has passed the Senate,” Recto said.
Recto filed Senate Bill 2913, or what he dubbed the “BBL”, in August last year after a public outcry over a Bureau of Customs’ plan to open and inspect balikbayan boxes revealed outdated regulations, one of which taxes any box whose contents is worth more than P10,000.
The BBL was later incorporated into the CMTA as Section 800 by Senator Sonny Angara, chair of the Senate Ways and Means committee.
Every three years after the effectivity of this Act, he said 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 said the “antiquated provision” of slapping a 50-percent 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 206.
Even the BoC Memorandum Circular 7990 which raised the maximum value of a tax-exempt balikbayan box to $500 is more than 25 years old, he said.
Recto said the proposed CMTA also increases to P350,000 the tax-exempt ceiling of “personal and household effects” that a returning resident who had lived abroad for 10 years may ship to the Philippines.
Recto said this provision was not in the BBL he filed but a brainchild of Senator Angara, principal sponsor of CMTA.
Recto praised Angara for shepherding the CMTA, with its many complicated provisions, to approval.