Balikbayan boxes tax-free starting Christmas

Don Kevin Hapal
Balikbayan boxes tax-free starting Christmas
Balikbayan boxes sent by qualified Filipinos abroad will be duty- and tax-free starting Christmas Day, December 25

MANILA, Philippines – Good news for overseas Filipino workers (OFWs). Starting Christmas Day, December 25, balikbayan boxes sent by Filipinos abroad will be duty-free and tax-free.

This is after the Bureau of Customs (BOC) and the Department of Finance (DOF) signed the implementing rules and regulations (IRR) covering a portion of the Customs and Modernization and Tariff Act (CMTA).

The tax exemption will cover only balikbayan boxes sent through consolidated shipments by Filipinos abroad to their families and relatives in the Philippines. The Customs administrative order lists the following Filipinos abroad who can qualify or avail of the duty and tax privileges on balikbayan boxes: 

  1. Holders of valid passports issued by the Department of Foreign Affairs (DFA) and certified by Department of Labor and Employment (DOLE) or Philippine Overseas Employment Administration (POEA) for overseas employment purposes regardless of profession
  2. non-resident Filipinos who have established permanent residency abroad but retained their Filipino citizenship
  3. resident Filipino citizens who temporarily stay abroad (may include holders of student visa, investors’ visa, tourist visa, and similar visas which allow them to establish temporary stay abroad). 

The following requirements must also be met or submitted by a “qualified Filipino while abroad” (QFWA):

1. Supporting documents:

    • Photocopy of a page of his/her Philippine passport with personal information, picture and signature, or photocopy of his/her foreign passport with personal information, picture and signature plus proof of copy of dual citizenship; and, 
    • Invoice, receipt or equivalent document covering the goods in the balikbayan box, if any.

2. A filled up, signed and submitted information sheet, which will be issued by BOC and will serve as the packing list.

3. The international forwarder/consolidator should submit these information sheets and supporting documents via a secure electronic format to a local (Philippine) forwarder/deconsolidator. 

4. The local forwarder/deconsolidator should transmit to the Bureau the information sheet and supporting documents via a secure electronic format before the arrival of the balikbayan boxes in the Philippines and within the period prescribed:

a) For consolidated shipments by sea:

  • For shipments that will take 3-day shipping time: 24 hours prior to arrival
  • For shipments that will take 7-day shipping time: 48 hours prior to arrival
  • For shipments coming from America, Europe, Middle East, and other parts of the world that do not fall under the above shipping times: 10 days prior to arrival

b) For consolidate shipments carried by aircraft: 

  • For those coming from Asia – 1 hour prior to arrival
  • For those coming from other countries – 6 hours prior to arrival

5. A QFWA should also certify that only personal effects and household goods, which shall not be in commercial quantities, are sent through balikbayan boxes. 

Expedited clearance

BOC Commissioner Nicanor Faeldon called on all international and local forwarders, foreign consolidators, and local deconsolidators to strictly follow these guidelines, to enable Customs to expedite clearance procedures. This will also allow them to ensure that all balikbayan boxes are delivered to receivers with utmost care.

“We value the importance of each balikbayan box. They symbolize the hardship of our overseas Filipino workers, and the love of Filipinos abroad for their families here in the country,” he said.

Faeldon earlier reminded all port officials and personnel to follow the Bureau’s “no opening of balikbayan boxes” policy, and to expedite release and handling of the boxes.

In November, Senators Ralph Recto and Juan Edgardo Angara urged the BOC to immediately implement the CMTA in view of the expected high number of OFWs coming home for Christmas.

“Pasado ng Kongreso, pirmado ng Presidente. Mukhang nadale ng red tape sa agency level. Kung ganito ang sitwasyon, baka puwedeng ipakiusap natin na kahit yung sections lang sa balikbayan boxes, ipatupad na kaagad,” Recto said.

(It was already passed in Congress, signed by the President. Looks like it was hit by red tape at the agency level. If this is the situation, maybe we can ask that at least the sections on balikbayan boxes be implemented immediately.) 

Under the CMTA, the government increased the value of balikbayan box items that should be subject to tax.

This law revised the tax ceiling to P150,000 ($3,060) from the previous P10,000 ($200). This means that balikbayan boxes with a value below P150,000 will be tax-exempt.

Then president Benigno Aquino III signed the CMTA on May 31, a month before he ended his term. –

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Don Kevin Hapal

Don Kevin Hapal is Rappler’s Head of Data and Innovation. He started at Rappler as a digital communications specialist, then went on to lead Rappler’s Balikbayan section for overseas Filipinos. He was introduced to data journalism while writing and researching about social media, disinformation, and propaganda.