Senate approves customs modernization act

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Senate approves customs modernization act
The act will modernize and digitize procedures, raise tax exemptions on balikbayan boxes, and raise penalties for smuggling

MANILA, Philippines – The Senate on Monday, January 18, approved on 3rd and final reading the proposed Customs Modernization and Tariff Act (CMTA), which will put the country’s custom procedures in step with global best practices.

It will achieve this by amending the current Tariff and Customs Code of the Philippines (TCCP).

“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. Approximately $277 billion (P13.23 trillion) in revenues was lost by the government from 1960 to 2011 due to technical smuggling according to a 2014 study of Global Financial Integrity,” said Senator Juan Edgardo Angara said.

Angara, the sponsor of Senate Bill 2968 or the CMTA, said the measure aims to amend the TCCP in compliance with the Revised Kyoto Convention (RKC), the blueprint for “modern and efficient customs procedures” of the World Customs Organization.

The bill also proposes the use of information and communications technology in order to harmonize trade facilitation.

Senate President Franklin Drilon said that upgrading the current Bureau of Customs systems to electronic processing would make the BOC’s importation and exportation procedures faster, more effective, and more convenient, especially for the public.

“The modernization under the CTMA will benefit millions of ordinary Filipinos who suffer from the inefficiencies in the handling of incoming and outgoing goods, especially during holiday seasons when Filipinos endure the cumbersome process of trying to claim gifts or packages which are stuck at the ports,” he said.

Increased tax exemptions for balikbayan boxes

The bill will also increase the de minimis value, raise the tax exemption ceiling for packages sent by balikbayans and returning residents, and provide harsher penalties for smuggling, Angara said.

De minimis denotes small items that are usually minor or lacking importance.

The CMTA came into the public consciousness during the balikbayan box controversy in August 2015, with the BOC calling for its quick passage. (READ: Customs chief: ‘Amend Law, modernize BOC’)

The bill proposes an increase in the tax-exempt value of balikbayan boxes from P10,000 ($477,855) to P150,000 ($3,139) and the de minimis value from P10 (P477.86) to P10,000.

The tax-exemptions and de minimis values may also change every 3 years. Donation and relief goods will also be duty- and tax-free during times of calamity.

Smuggling deterrence

Angara said the bill also aims to ingrain transparency and accountability into the BOC. Apart from drastically reducing human intervention due to the digitization of customs procedures, higher penalties and punishments will be prescribed as a further deterrent to smuggling.

“Our measure clearly defines the exercise of customs police authority, customs jurisdiction, and customs control,” he said.

BOC officials said they anticipate a 10% increase in revenue collection once the bill is enacted into law.

Customs missed its revenue target last year, the 5th straight year it has done so. –


$1 = 47.77

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