Revise‘balikbayan’box tax rules, DoF urged

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A lawmaker has called on the Finance department to comply with the intent of the Customs Modernization and Tariff Act (CMTA) particularly the provisions concerning balikbayan (returnee) boxes to make sure that overseas Filipino workers (OFWs) could benefit from the law.

Former President Benigno Aquino 3rd in May 2016 signed into law Republic Act (RA) 10863 or the CMTA increasing the tax-exemption ceiling on balikbayan boxes from P10,000 to P150,000.

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 nor intended for barter, sale or for hire.

The law is also aimed at overhauling and modernizing the Bureau of Customs (BoC), which has been perceived as one of the most corrupt and under-performing government agencies in the country.


But the Department of Finance (DOF) in its implementing rules on duty and tax-free balikbayan boxes, under Customs Administrative Order (CA0) 5-2016, states, “All balikbayan boxes per sender in any calendar year shall not exceed P150,000.”

This was learned by Sen. Juan Edgardo Angara during an oversight committee hearing on the review of CMTA’s implementation, noting that the provision on CMTA implementing rules and regulation (IRR) could cause confusion and might even deny OFWs of the benefits the law intends to provide them.

Angara, the sponsor of the Senate version of the CMTA, pointed out that such rule is contrary to the intent of the law, which provides that OFWs could send up to three P150,000 worth of tax and duty-free balikbayan boxes, or not exceeding P450,000 in a year, given that the goods are not in commercial quantities.

“[The intention of the CMTA is to make balikbayan boxes worth P150,000 three times a year tax-exempt and not P150,000 divided by three],” he said.

DoF Assistant Secretary Mark Joven, during the hearing, explained that there is an “ambiguity” in the language of the law, and it is the reason why the Finance department interpreted the provi- sion differently.

But party-list Rep. Sharon Garin, a member of the oversight committee, said the DoF should have referred to the records of the bicameral conference committee hearing when it was drafting the IRR for it to determine the intent of the law.

Angara said exempting balikbayan boxes from taxes means “doing justice to OFWs who remit billions of pesos every year.”

He urged the DoF and the BoC to immediately resolve the issues on the implementing rules of the balikbayan box law especially as Christmas season nears.

On top of the tax and duty-free balikbayan boxes, the CMTA also grants Filipinos who have stayed in a foreign country for at least 10 years and are returning to the Philippines tax exemption for personal and household effects not exceeding P350,000.

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 fewer than five years can enjoy P150,000 tax-free ceiling.

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