MANILA, Philippines – Senator Juan Edgardo Angara is seeking to increase the ceiling of tax- and duty-free items and goods from overseas Filipino workers (OFWs) from the present P10,000 ($213.99) to P150,000 ($3209.85).
Angara, chairman of the ways and means committee said on Monday, August 24, that his committee is now prioritizing the proposed Customs Modernization and Tariff Act (CMTA), in a bid to introduce reforms to the Bureau of Customs (BOC), including raising the tax exemption for items sent home by OFWs to their loved ones.
Such is good news amid the flak that the Bureau of Customs has been getting for tightening rules on sending and inspecting balikbayan boxes. (WATCH: Rappler Talk: Why the Bureau of Customs opens your #BalikbayanBox)
BOC said the stricter measures on balikbayan boxes is the bureau’s way to curb smuggling goods into the country. It earlier said that it is losing an average of P50 million ($1.07 million) per month or P600 million ($12.84 million) yearly from unscrupulous traders abusing the consolidated shipments.
“We need to update this outdated value. P10,000 is now too small and will not even justify the cost of enforcement if we recover goods slightly over this value,” Angara said.
He added that focus should be directed on bigger fish and big time violators given the limited enforcement capacities.
BOC earlier clarified that it is not increasing taxes on balikbayan boxes but aims to to stop the abuse of the system by smugglers.
BOC Commissioner Alberto Lina appealed to Filipinos who are sending or bringing items home to honestly declare them so the agency can collect appropriate taxes. (READ: Customs’ Bert Lina: Be honest, declare what’s in your #BalikbayanBox)
Justice to OFWs
Following BOC’s announcement on the increase in number of random inspection of balikbayan boxes, many OFWs have turned to social media to complain about items in their balikbayan boxes that were reportedly stolen or damaged upon inspection.
Angara said that while random inspection is allowed under the current law, BOC officials should speed up the processing of these packages and treat them with utmost care and respect.
Angara added that increasing balikbayan boxes’ tax exemption cap means “doing justice to OFWs who remit billions of pesos every year.”
Thus, the proposed CMTA provides for a less intrusive examination of goods brought in to the country, he added.
To serve as an effective deterrent to smuggling, the proposed CMTA aims to increase the outdated amount of fines and penalties on misdeclaration or underdeclaration of goods under the Tariff and Customs Code of the Philippines.
Senator Ralph Recto earlier proposed to increase the current allowed tax-exempt value of balikbayan box contents to $1500 (P70,096.36) – a “small thing compared to the P2.28 trillion that [overseas Filipinos] sent back home last year.” – Rappler.com
US$1 = P46.75