Press Release
January 22, 2016


Overseas Filipino workers (OFWs) can soon enjoy tax and duty free balikbayan boxes as the members of the bicameral conference committee on the Customs Modernization and Tariff Act (CMTA) have agreed to retain the provision 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. Senator Sonny Angara, chairman of the ways and means committee and sponsor of the CMTA, said that 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. Nagpapasalamat po ako sa mga miyembro ng bicam na hindi na namin kinailangang pag-debatehan ang isyung ito. Ang pagtanggal ng buwis sa balikbayan boxes ay pagbibigay hustisya sa ating mga OFWs na nagreremit ng bilyun-bilyon taun-taon," he said.

Aside from Angara, other legislators who attended the two-day bicam were Senator Bam Aquino, House Ways and Means Committee Chairman Rep. Miro Quimbo, Reps. 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, given 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Angara noted that the outdated P10,000-tax exemption ceiling, as provided under the late President Corazon Aquino's Executive Order 206 in 1987, is now too small.

"Ayon sa aming pag-aaral, ang isang ordinaryong OFW ay nagpapadala ng balikbayan box na may lamang P80,000 worth of items kada tatlo o apat na buwan. Para dagdag pakunswelo sa ating mga magigiting na OFW, ginawa namin itong P150,000," the lawmaker explained.

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.

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 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 stressed 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," he said.

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

It also mandates the use of information and communications technology and other appropriate applications that speed up not only the inner-workings of Customs, but also make it more transparent.

"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.

The ways and means chairman said he is targeting to report out the bicameral conference committee report for ratification next week.

The senator added that he is confident that the President will sign this bill, which languished in Congress for almost a decade, into law since it has been identified as one of the priority measures of the Aquino administration and both Houses of Congress.

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