Overseas Filipino workers (OFWs) can soon enjoy tax and duty-free balikbayan (returnee) boxes as members of the bicameral conference committee on the Customs Modernization and Tariff Act (CMTA) have agreed to retain a provision increasing the tax-exempt value of items sent by Filipinos abroad` to their families back home.
Under the proposed CMTA, the tax exemption ceiling will be increased from the present P10,000 to P150,000.
Senator Juan Edgardo Angara, chairman of the ways and means committee and sponsor of the CMTA, said it was a unanimous decision among the bicameral conferees to raise the tax exemption ceiling.
“It was really the intent of both Houses to increase the values,” he added.
Aside from Angara, other legislators who attended the two-day bicam were Senator Paolo Aquino 4th, House ways and means committee chairman Rep. Miro Quimbo and Representatives Sharon Garin, Magtanggol Gunigundo, Estrellita Suansing, Raneo Abu and Terry Ridon.
The bill further provides that OFWs can send up to three P150,000-worth of tax and duty free balikbayan boxes in a year, provided that the goods are not in commercial quantities nor intended for barter, sale or for hire.
Angara noted that the outdated P10,000-tax exemption ceiling, as provided under the late President Corazon Aquino’s Executive Order 206 in 1987, is now too small.
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.
Those who have lived overseas for at least five years 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.
Moreover, the proposed CMTA 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.
“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The senator added that to permanently do away with the outdated values, the bill provides for an automatic indexation of the amounts every three years to account for inflation.
“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.