Press Release
November 14, 2016

Recto: Even without IRR, P150K balikbayan boxes should be deemed tax-exempt

Senate Minority Leader Ralph Recto said the Bureau of Customs (BOC) has no option but to waive the payment of taxes for balikbayan boxes containing less than P150,000 worth of "pasalubong" as the new law prescribing higher tax-exempt rates should be deemed in effect.

The absence of the new law's implementing rules does not prevent the government from complying with a portion of it, Recto said.

The balikbayan boxes which have arrived or will arrive Manila, according to Recto, must be covered by the P150,000 duty- and tax-free tax ceiling for shipments from overseas Filipino workers (OFWs) pursuant to the Customs Modernization and Tariff Act (CMTA).

"Hindi kasalanan ng mga OFWs natin kung natagalan ang pagbuo ng impementing rules for the CMTA. Matagal nang pasado ang batas na iyan at dapat lamang na makinabang na ang mgaOFWs natin diyan," Recto stressed.

"The BOC plans to release the implementing rules next month, but Filipinos overseas have started shipping their balikbayan boxes, some as early as September, when the law was already in effect," the senator explained.

"As the CMTA is a voluminous law, then government should not wait for an omnibus IRR (implementing rules and regulations) that will cover all of its provisions. It can, in the meantime, issue an IRR just on balikbayan boxes and other OFW shipping privileges," Recto said.

"Pasado ng Kongreso, pirmado ng Presidente. Mukhang nadale ng red tape sa agency level. Kung ganito ang sitwasyon, baka pwedeng ipakiusap natin na kahit yung sections lang sa balikbayan boxes, ipatupad na kaagad," he added.

To expedite things, the BOC can come up with its own order covering the particular section of the CMTA that deals with higher balikbayan box values, Recto said.

"They can even copy-paste the self-explanatory pertinent sections and display them near airport baggage carousels and disseminate it through social media," he said.

This should be done soon, he said, in view of the expected high number of overseas Filipinos coming home for Christmas. "This should be seen as a pro-OFW move, part of the traditional red carpet treatment given to OFWs during the holidays."

"Kahit ano pang tarpaulin ang ilagay mo na 'Pamaskong Handog ni Pangulong Digong', kung hindi ipapatupad ang bagong batas sa balikbayan boxes ngayong pasko, wala ring epekto," he lamented.

Recto filed Senate Bill 2913, or what he dubbed the Balikbayan Box Law, or BBL, in August last year after a public outcry over a 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 was later incorporated into the CMTA as Section 800 by Senator Sonny Angara, chair of the Senate Ways and Means committee. It was signed into law by President Aquino on May 31, 2016.

Under Section 800 of the CMTA, "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 be enjoyed "up to three times in a calendar year," 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."

"This is to prevent senders from abusing this privilege. With this privilege comes the duty to observe the law. There are penalties so that smugglers won't take advantage of it," Recto explained.

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