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Also, the matters contained in the following were written in accordance with the law, rules, and jurisprudence prevailing at the time of writing and posting, and do not include any future developments on the subject matter under discussion.
AT A GLANCE:
Under the Customs Modernization and Tariff Act (CMTA) and Customs Administrative Order (CAO) 02-16, imported goods with “De Minimis value” are considered imports of “negligible amount”, and are thus duty and tax-free, and also entitled to immediate release from customs.
Upon the effectivity of the said laws, the De Minimis value of imports went from ₱10 to ₱10,000. The increased threshold means that importers of goods amounting to less than ₱10,000 need not worry about paying for additional costs on duties and taxes.
In 2016, the Customs Modernization and Tariff Act (CMTA) or Republic Act (R.A.) No. 10863 was enacted, and the Customs Administrative Order (CAO) 02-16 was issued by the Bureau of Customs. Under the CMTA and CAO 02-16, imported goods with “De Minimis value” are considered imports of “negligible amount”, and are thus duty and tax-free, and also entitled to immediate release from customs.
Some of the most salient points of the above were provisions on the fixed De Minimis Value, and the simplified system of lodging, processing, and examination of De Minimis Value imports.
De Minimis Value from ₱10 to ₱10,000
Before the CMTA and its implementation through CAO 02-16, the De Minimis value of imports was ₱10. Upon the effectivity of the mentioned laws, the De Minimis value of imports became ₱10,000. To quote, according to Sec. 423 of the CMTA:
No duties and taxes shall be collected on goods with [a Free on Board (FOB) or Free Carrier At (FCA)] value of ten thousand pesos (P10,000.00) or below.
The increased threshold means that importers of goods amounting to less than ₱10,000 need not worry about paying for additional costs on duties and taxes.
Simplified Import System
In implementing the provisions of Sec. 423 of the CMTA, CAO 02-16 provides that De Minimis imports shall be lodged and processed under a simplified system. Additionally, this simplified process shall be “with the use of information and communications technology (ICT) enabled system to allow advance clearance, and ensure proper customs monitoring and control, which captures and preserves pertinent date on De Minimis importations.”
When it comes to the examination of De Minimis imported goods, as far as practicable, they shall be subject to a non-intrusive examination – for example, by way of an x-ray or equivalent device – and on a random basis scheme used by the Bureau of Customs. Physical inspection by the customs examiner may be allowed, based on internationally accepted customs administration risk management principles.
RELATED ARTICLES:
- Cross-Border Electronic Invoicing System of All Import Commodities under the OP Administrative Order No. 23, May 13, 2024
- Ban on importation of certain products under the Customs Modernization and Tariff Act
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Alburo Alburo and Associates Law Offices specializes in business law and labor law consulting. For inquiries regarding legal services, you may reach us at info@alburolaw.com, or dial us at (02)7745-4391/ 0917-5772207/ 09778050020.
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