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Bicam OKs P150,000 tax exemption for balikbayan boxes

Bicam OKs P150,000 tax exemption for balikbayan boxes

 (The Philippine Star) |

MANILA, Philippines – The bicameral conference committee on the Customs Modernization and Tariff Act (CMTA) has agreed to retain a provision in the measure increasing the tax-exempt value of items sent by overseas Filipinos to their families back home.

Under the proposed CMTA, the tax exemption ceiling will be increased from the present P10,000 to P150,000.

The bill also allows overseas Filipinos to send up to three balikbayan boxes a year,  each with P150,000 worth of tax and duty free goods, provided these are not in commercial quantities or intended for barter, sale or for hire.

Sen. Juan Edgardo Angara, chairman of the ways and means committee and sponsor of the CMTA, said raising the tax exemption ceiling was a unanimous decision among members of the bicameral committee.

“It was really the intent of both Houses to increase the values,” he said.

“I’m thankful members of the bicameral need not debate on this issue. Removing taxes on balikbayan boxes is doing justice to OFWs who remit billions every year,” Angara said in Filipino.

The senator said he hopes to see the bicameral conference committee report completed for ratification next week.

He expressed confidence the President will sign the bill as it has been identified as one of the priority measures of the Aquino administration. The measure languished in Congress for almost a decade.

Aside from Angara, other legislators who attended the two-day bicameral meeting were Sen. Bam Aquino, House ways and means committee chairman Rep. Miro Quimbo, and Reps. Sharon Garin, Magtanggol Gunigundo, Estrellita Suansing, Raneo Abu and Terry Ridon.

Angara noted that a P10,000-tax exemption ceiling, as provided for under the late President Corazon Aquino’s Executive Order 206 in 1987, is now too small.

He said based on their research, an ordinary OFW sends to his family around P80,000 worth of items every three to four months.

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 personal and household effects not exceeding P350,000.

Filipinos who have lived overseas for at least five years would 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.

Moreover, the proposed CMTA raises the de minimis value, which refers to the minimum cost of goods required to undergo formal Customs entry, from the present P10 to P10,000.

“With the increase in the de minimis value, we lessen the discretion of the Customs officials to inspect goods and collect taxes, thus minimizing cases of corruption and smuggling,” Angara said.

The senator stressed that to permanently do away with outdated values, the bill provides for an automatic indexation of the amounts every three years to account for inflation.

“The updating of such outdated values is just among the more than 300 sections of the almost 200-page CMTA bill which generally aims to simplify, modernize and align the country’s customs procedures with global best practices,” Angara said.

The bill simplifies and clarifies customs procedures including import clearances and valuations, making the release of goods much faster, regardless of whether the importer is an individual entrepreneur or a large multinational firm.

“We want to overhaul and modernize the bureau which has long been perceived as one of the most corrupt and underperforming government agencies in the country. The CMTA reinforces BOC functions as trade facilitator rather than just being a revenue-generating agency,” Angara said.

Source: www.philstar.com

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