For our OFWs who regularly sends balikbayan boxes, this new law signed by President Aquino is a great help! Know how much is the tax exemptions on your pasalubong and cargo boxes.
Last year end of August 2015, Senator Ralph Recto sponsored Senate Bill 2913 popularly known as Balikbayan Box Law or BBL. Later on this bill was adopted and incorporated into the Customs Modernization and Tariff Act (CMTA) otherwise known as Republic Act 10863 and now is a LAW after President Benigno Aquino signed it this 2016. The CMTA sponsor is Senator Sonny Angara, head of the Senate Ways and Means Committee. Under the CMTA, the BBL became part of what is known as SUPER SECTION 800.
What is Super Section 800?
The Section 800 of the CMTA law is all about conditional-free and duty-free importation. Why this section was dubbed “SUPER”? This is because this section is the most demanded and most useful to the millions of our kababayans and OFWs residing and working abroad.
This is a great benefit for our kababayans na nawalay sa mga pamilya nila dito sa Pilipinas para mag trabaho sa ibang bansa. Ngayon, tax free na ang magpadala ng balikbayan box not exceeding P150,000 worth of personal and household effects only.
The CMTA Law is applicable to Balikbayan Boxes sent via couriers abroad and those that will be physically brought by our OFWs when they come home to the Philippines.
How many times within a year can an OFW send or bring home balikbayan boxes and still not be taxed? You can send or bring pasalubong boxes up to 3 times every year, each time you can send max of P150K tax-free.
Example: You will send 3 Balikbayan boxes at the same time on February 2017 worth P132,000. This will be counted as one shipment transaction or one pasalubong padala.
PRACTICAL APPLICATION for our OFWS
If you are an OFW returning or visiting home, and at the airport custom officers accosted you and your balikbayan boxes demanding that you pay taxes on them, but you know that the total value or worth of the contents of your balikbayan box is equal to or less than P150,000, inform the BOC or Immigration Officer that the contents of the box does not exceed he P150,000 limit and should be tax-free and duty-free based on Super Section 800 of CMTA. They are your pasalubong and gifts to family and relatives. You do not intent to sell the items.
ONLINE SELLERS BEWARE – CMTA does not exempt you from paying taxes
There are lots of online sellers offering imported goods and products at lower prices versus mall prices. Many sellers, online or not, conduct legit businesses but there are a few who smuggles products into the country by way of the Balikbayan Box. Please know that the new rule on Balikbayan box tax free entry does not apply in this case.
**If you went abroad to buy goods or products say during Singapore or Hong Kong sale, and you intend to sell online or barter in the country the products you bought overseas – your purchases and cargo are still subject to tax. This situation is not covered by this bill. If you hide the purchases you bring into the country from custom officials, then what you are doing is smuggling. Smuggling is punishable by law.
The CMTA or the Customs Modernization and Tariff Act, Section 800 was passed to serve the needs of our OFWs and Filipinos now residing overseas. It allows entry of legit Balikbayan Boxes worth up to P150,000 with no tax. Together with this new great benefit, stricter punishments will be imposed on those who will abuse / use this law to smuggle goods in the country. Please be aware.
CMTA Provision for Inflation
The best part is that this law has a provision which allows adjustment on the maximum amount every 3 years to cater to inflation and rising prices. So by 2019, expect the P150,000 limit to be a bit higher. By how much? It still depends on the inflation rate and the propose increase by the Secretary of Finance upon the recommendation of the Custom Commissioner when 2019 comes.
RETURNING TO THE PHILIPPINES – Bigger Maximum Amount
The CMTA Super Section 800 also provides for the following:
For Filipinos who resides abroad for at least 10 years and who will return for good to the Philippines will be allowed bigger amount. Instead of just P150,000, these Filipinos can bring in maximum of P350,000 of household and personal effects.
For Filipinos who resides and works abroad for at least 5 years they are entitled to P250,000 tax-free exemptions on balikbayan boxes.
For Filipinos who resides and works abroad for less than one year, they are entitled to P150,000 tax-free exemptions.
The old maximum allowable tax free cargo of OFW is just P10,000. Now, it is P150,000. A big win para sa ating mga bagong bayani!
The main source for this article about OFW Balikbayan Box tax exemptions is direct from the official Philippine Senate website.