Press Release
August 21, 2016

Before pitching new taxes, Palace must first issue rules on new PWD, balikbayan box laws

Before it rolls out its tax proposals, Malacañang should first issue the Implementing Rules and Regulations (IRR) of the law granting tax breaks and other benefits for persons with disabilities (PWDs) and those of another law raising the tax-exempt value of balikbayan boxes.

The demand was made by Senate Minority Leader Ralph Recto, who said that releasing the long-delayed IRR of Republic Act 10754 will allow its provisions to be enjoyed by millions of PWDs.

RA 10754 exempts PWDs from all sales taxes on certain goods and services, like transport fares, medicines, medical and dental services and laboratory fees, raising the total discount to 32 percent.

It also grants a P25,000 annual income tax deduction to relatives within the fourth civil degree of consanguinity or affinity, who are caring for and living with a PWD.

Although signed by President Aquino last March 23 or almost five months ago, the law's implementation has been stymied by the lack of the implementing rules.

Recto said Malacañang should order the IRR's immediate release "before conspiracy theorists go to town with the speculation that its release is being delayed to pave the way for the reported delisting of PWD privileges" in the tax reform package it would unveil soon.

Another law facing the same predicament of "being effectively frozen by red tape" is RA 10863, the Customs Modernization and Tariff Act (CMTA), which raises the tax-exempt value of balikbayan boxes and other personal belongings shipped home by overseas Filipino workers (OFWs).

Signed by President Aquino on May 30 this year, the law allows OFWs to 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 of sale.

The law further allows Filipinos, who have lived in a foreign country for at least 10 years and are returning to the Philippines, to bring with them, tax-free, personal and household effects valued not more than P350,000.

Recto said that the IRR for this law, "or at least for the provisions covering balikbayan boxes, or the section that is popularly known as the BBL or the Balikbayan Box Law," be drafted and promulgated immediately.

He was referring to Section 800, Chapter 1, Title VIII of the Customs Modernization and Tariff Act. While the CMTA runs into hundreds of pages and overhauls the Bureau of Customs (BOC) processes, its "BBL" portion is what concerns overseas Filipinos most.

Recto, however, believes "that insofar as the new rates for balikbayan boxes are concerned, the new law is clear and self-explanatory, that it should be invoked by the shipper as a right, and respected by the BOC as the rule, sans IRR."

"Just the same, there should be an IRR for that section, in order to avoid confusion, and so that OFWs starting to fill their balikbayan boxes to send here in time for Christmas will be properly guided as to the limit of the contents," Recto said.

In calling for clear-cut rules, the senator pointed out that traditionally the "ber" months in the year is the balikbayan box season, "the start of the voyage of these gifts for loved ones back home."

Recto said the rules governing these two laws benefitting PWDs and OFWs must be expedited as they are the missing link for the enjoyment of the hard-fought benefits they bring.

RA 10754, or the "Act Expanding the Benefits and Privileges of Persons with Disability," tasks the Department of Social Welfare and Development (DSWD), in consultation with the Department of Health (DOH), Department of Finance (DOF) and the National Council on Disability Affairs (NCDA) to formulate the law's IRR.

Recto explained the importance of the IRR as it is seen by affected entities, like drug stores, as a requisite before they can carry out the provision of the law discounting purchases made by PWDs.

Although the law contains the provision "that failure of the concerned agencies to promulgate the IRR shall not prevent the implementation of this Act upon its effectivity," Recto said "for purposes of clear implementation, there is still no substitute for a set of written implementing rules."

"The automatic implementation clause kicks in only when there is deliberate move to deny or delay the release of the IRR. But I don't think that's happening. I am optimistic that the rules will soon be released," Recto said.

While no such automatic implementation clause is in the CMTA, the provisions pertaining to balikbayan boxes is clear, concise, well-known so that any OFW can invoke them as guide when packing or bringing these pasalubongs, Recto said.

"I understand that the IRR for CMTA would take a long time writing because it is a complex law. My appeal is that if the comprehensive IRR is not possible at the moment, then perhaps the one for Section 800 be promulgated ahead," he said.

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