A new Balikbayan Box Law that will raise to P150,000 the tax-exempt value of pasalubong cargo brought in or sent by overseas Filipinos is up for Senate approval after the measure was consolidated with a Customs reform bill, Senate President Pro Tempore Ralph G. Recto said today.
The proposed Balikbayan Box Law is now a section in the proposed Customs Modernization and Tariff Act (CMTA), Recto said. “Yan ang naging agreement na ang ‘BBL’ ay isama na lang sa CMTA.”
The CMTA bill was sponsored on the floor by Sen. Sonny Angara, Chair of the Senate Ways and Means Committee, last month, Recto said.
Recto filed Senate Bill 2913, or what he dubbed the “BBL” or Balikbayan Box Law, in August, after a public outcry over a Bureau of Customs’ (BoC) plan to open and inspect balikbayan boxes revealed outdated regulations, one of which taxes any box whose contents is worth more than P10,000.
The BBL, Recto said, is now a part of a section of the proposed CMTA which defines “conditionally-free and duty-exempt importation.”
Under this section, “residents of the Philippines, Overseas Filipino Workers, other Filipinos while residing abroad or in their return to the Philippines shall be allowed to bring in or send to their families or relatives in the Philippines balikbayan boxes which shall be exempt from duties and taxes.”
The “total dutiable value” of the boxes shall not exceed P150,000.
The privilege can only be enjoyed “up to three times in a calendar year,” Recto said, quoting the proposed law.
“This means that an OFW can send two boxes at the same time provided that their total worth is not more than P150,000. That will be counted as one shipment,” Recto said.
The boxes, however, must contain “personal and household effects only and shall neither be in commercial quantities, nor intended for barter, sale or for hire,” the said section further reads.
“This is to prevent senders from abusing this privilege. With this privilege comes the duty to observe the law. And it also comes with penalties so that smugglers won’t take advantage of it,” Recto explained.
The bill also includes a provision indexing rates to inflation, “so that it will not take another quarter-of-a-century to adjust the tax-exempt ceiling for balikbayan boxes,” Recto said.
“Every three years after the effectivity of this Act, the Secretary of Finance, upon recommendation of the Commissioner (of Customs), shall review the value herein stated and shall adjust its present value using the Consumer Price Index as published by the Philippine Statistics Authority,” Recto quoted the provision.
Recto said the “antiquated provision” of slapping a 50 percent duty on the value of a balikbayan box in excess of P10,000 was set 28 years ago through President Corazon Aquino’s Executive Order 206.
Even the BoC Memorandum Circular 7990 which ups the maximum value of a tax-exempt balikbayan box to $500 is more than 25 years old, he said.
Recto said the proposed CMTA also increases to P350,000 the tax-exempt ceiling of “personal and household effects” that a returning resident who had lived abroad for 10 years may ship to the Philippines.
“Wala ito sa BBL. And I am glad that Senator Angara included it in his report,” Recto said.
The measure has been described by Angara as a “broad reform measure which simplifies rules, aligns tariff regime with treaties, promotes transparency, and combats smuggling.”
It is a consolidation of eight bills, two of which are authored by Recto. The other one is Senate Bill 456, which increases penalties for smuggling.