‘Common sense won’: DFA, Recto hail suspension of balikbayan box tax rules; BOC team to craft revisions

October 8, 2017 - 9:15 AM
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tax free balikbayan boxes
Balikbayan boxes stacked at the Bureau of Customs. The BOC chief warned netizens against online lovers claiming they sent gift boxes to local victims, but then use scammers to extract funds to "pay for Customs fees" to secure the gift boxes' release. FILE IMAGE GRAB FROM BLOOMBERG TV PHILS.

MANILA – The drafting team of the Customs Modernization and Tariff Act will meet with stakeholders for consultation to craft amendments on two circulars governing balikbayan box rules which the Bureau of Customs suspended last week, Customs chief Isidro Lapeña said.

This, as the Department of Foreign Affairs and Senate President Pro Tempore Ralph Recto hailed BOC’s decision to suspend implementation of the duty- and tax-free privileges of consolidated balikbayan boxes, saying this is good news for hundreds of thousands of overseas Filipinos.

Recto, who was the first to point out the tedious requirements in shipping balikbayan boxes, described the order of Commissioner Isidro Lapena to freeze the Bureau of Customs’ guidelines on tax-free packages sent home by OFWs “as a blow against red tape.”

Recto said “common sense won” when the newly-named Customs chief suspended on Oct. 3 the requirements for balikbayan senders to fill up an information sheet and submit a photocopy of their Philippine passport and purchase invoices of goods to be shipped.

When the now recalled guidelines first came out in July, Recto had warned that BOC’s order for senders to paste a detailed list of contents on the box “was tantamount to providing a keyhole that might tempt unscrupulous handlers to open it and rid it of its contents.”

Recto authored and campaigned for a law raising the tax-exempt value of balikbayan boxes.

This resulted in Section 800 (g) of CMTA which allows OFWs and other Filipinos residing abroad to bring in or send to their families in the Philippines tax-free balikbayan boxes, whose contents are not intended for barter and sale, and as long as they are not worth P150,000.

For his part, Foreign Affairs Secretary Alan Peter Cayetano said in a statement, “We would like to thank the Bureau of Customs and also the Department of Finance for being sensitive to the needs of our kababayans abroad and for listening to their appeals.”

Cayetano said Philippine embassies and consulates general in the United States and other balikbayan box-sending countries abroad have been receiving requests for assistance from members of Filipino communities who will be affected by the orders.

Affected Pinoys’ appeal

On Thursday, customs authorities announced the temporary suspension until March 31, 2018 of Customs Administrative Order 05-2016 and Customs Memorandum Order 04-2017, in response to the appeals of Filipinos abroad who would be affected by the new tax policy.

With the suspension, Filipinos abroad are no longer required to present proofs of purchase for items they place inside balikbayan boxes that they send to their families in the Philippines.

Under Customs orders, qualified Filipinos while abroad (QFWA) must accomplish the Information Sheet, submit a photocopy of the Philippine passport, a copy of invoice, and proof of purchase of the goods contained in the box to be qualified for the P150,000 tax exemption.

“Although it is our duty to facilitate customs clearance of balikbayan boxes, we cannot set aside the sentiments of our fellow Filipinos abroad,” Lapeña said.

The drafting team of the Customs Modernization and Tariff Act will meet with the stakeholders for consultation to make the necessary amendments on the CAO and CMO, he added.

“With the suspension of the current procedure on balikbayan box, the previous regulation will be enforced,” Commissioner Lapeña.

Recto recalled that when the Customs Modernization and Tariff Act was being threshed out, “It is clear in the CMTA, and in the debate records of the House and the Senate, that an OFW can send home, tax- and duty-free, a balikbayan box valued not more than P150,000 three times a year,” Recto said.

Recto said the previous BOC management “wrongfully read the cap on the privilege as P150,000 a year, when that amount is per shipment, which can be availed of three times annually.”

Impact on relief goods

Another concern of Recto is one provision in the CMTA which has a bearing on the “Marawi crisis, the typhoons which hit us, and our misfortune of being at the receiving end of calamities — man-made and natural.”

Recto said Section 120 of the CMTA deals with “relief consignment” or goods such as food, medicine, equipment, shelter materials for free distribution to or use of victims of calamities.

Under the law, “clearance of relief consignment shall be a matter of priority and subject to a simplified customs procedure,” Recto said.

“These shipments must be cleared beyond the designated office and shall be waived of corresponding charges. The examination of goods are allowed only in exceptional circumstances,” he said.

“Halimbawa na lang : If balikbayan box rules limit the consignees to relatives of senders, what is the rule to be followed if a kindhearted OFW sends a package to a non-relative in Marawi?” he said.

Under the law, the Department of Finance and the Department of Social Welfare and Development shall jointly issue the rules and regulations on relief consignment.

“Hopefully meron na, so that when governments and citizens of predominantly Muslim nations will send aid to Marawi, either by barges or by boxes, the rules are already in place,” he said.