Balikbayan box tax suspension pushed

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SENATOR Ralph Recto and Foreign Affairs Secretary Alan Peter Cayetano on Saturday said thousands of Filipino overseas will benefit from the move of the Bureau of Customs (BOC) suspending the balikbayan box tax measure.

Recto said “common sense won” when Customs Commissioner Isidro Lapena suspended on October 3 the requirements for balikbayan senders to fill up an information sheet, submit a photocopy of their Philippine passport, and purchase invoices of goods to be shipped.

Recto warned in July that BOCs order for senders to paste a list of contents on the box “was tantamount to providing a keyhole that might tempt unscrupulous handlers to open it and rid it of its contents.”

“If it is itemized, it’s as if you’re saying, ‘Open me, I’m yours,’” he added.


Cayetano said the suspension of the implementation of the duty- and tax-free privileges of consolidated balikbayan boxes “is good news for the hundreds of thousands of overseas Filipinos.”

“We would like to thank the Bureau of Customs and also the Department of Finance for being sensitive to the needs of our kababayans [countrymen]abroad and for listening to their appeals,” he said.

Cayetano said Philippine embassies and consulates general in the United States and other countries where balikbayan come from have been receiving requests for assistance from members of Filipino communities who will be affected by the orders.

The BOC announced on Thursday the temporary suspension until March 31, 2018 of Customs Administrative Order (CAO) 05-2016 and Customs Memorandum Order 04-2017.

Lapena recalled CAO 05-2016, which tightened controls on balikbayan boxes, and CAO 04-2017, which aligned balikbayan privileges with Republic Act 10683, the Customs Modernization and Tariff Act (CMTA), and ordered their review.

Recto welcomed the review as an opportunity to purge the current guidelines of “bureaucratic overreach and a wrong interpretation of the law.”

“It is clear in the CMTA, and in the debate records of the House and the Senate, that an OFW [overseas Filipino worker]can send home, tax- and duty-free, a balikbayan box valued not more than P150,000 three times a year,” he said.

Recto said the previous BOC management “wrongfully read the cap on the privilege as P150,000 a year, when that amount is per shipment, which can be availed of three times annually.”

Provisions of CMTA

Another concern of Recto is one provision in the CMTA that has a bearing on the “Marawi crisis, the typhoons which hit us, and our misfortune of being at the receiving end of calamities – man-made and natural.”

He said Section 120 of the CMTA deals with “relief consignment” or goods such as food, medicine, equipment, shelter materials for free distribution to or use of victims of calamities.

Under the law, “clearance of relief consignment shall be a matter of priority and subject to a simplified customs procedure,” the senator said.

“These shipments must be cleared beyond the designated office and shall be waived of corresponding charges. The examination of goods are allowed only in exceptional circumstances,” he said.

“For example: If balikbayan box rules limit the consignees to relatives of senders, what is the rule to be followed if a kindhearted OFW sends a package to a non-relative in Marawi?” Recto added.

Under the law, the Department of Finance and the Department of Social Welfare and Development should jointly issue the rules and regulations on relief consignment.

“Hopefully there’s one already, so that when governments and citizens of predominantly Muslim nations will send aid to Marawi, either by barges or by boxes, the rules are already in place,” he said.

Recto authored for a law raising the tax-exempt value of balikbayan boxes.

This resulted in Section 800 (g) of CMTA which allows OFWs and other Filipinos residing abroad to bring in or send to their families in the Philippines tax-free balikbayan boxes, whose contents are not intended for barter and sale, and as long as they are not worth P150,000.

Cayetano said with the suspension of CAO 05-2016 and CAO 04-2017, Filipinos abroad are no longer required to present proofs of purchase for items they place inside balikbayan boxes that they send to their families in the Philippines.

Under both orders, Filipino citizens who send balikbayan boxes to the Philippines are also required to submit a photocopy of their Philippine passport to avail of the government’s tax exemption.

Customs authorities said the decision to suspend the orders was in response to the appeals of Filipinos abroad who would be affected by the new tax policy.

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