Overseas Filipino workers (OFWs) can now send or bring more goods to the country because of the signing into law by President Benigno Aquino 3rd of the Customs Modernization and Tariff Act (CMTA) which increases the tax-exempt value of items sent by migrant workers to their families.
The CMTA or Republic Act 10863 increases the tax exemption ceiling from the present P10,000 to P150,000.
Aside from the higher tax exemption ceiling, RA 10836 will also provide more protection to OFWs against unscrupulous Customs and other government employees involved in pilfering balikbayan (returnee) boxes or extorting money from OFWs.
Recto said Section 1431 of the CMTA increased the penalty for government employees found guilty of extorting money from balikbayans to a minimum of six years to 12 years imprisonment.
Additional penalties include forfeiture of all benefits as well as perpetual disqualification from holding public office.
“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,” said Senator Juan Edgardo Angara, chairman of the ways and means committee and sponsor of the CMTA.
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.
Angara said 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, that 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 a 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.
Angara noted that to permanently do away with the outdated values, the newly-signed law provides for an automatic indexation of the amounts every three years to account for inflation.
“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,” he added.