- President Benigno Aquino III signed the Customs Modernization and Tariff Act (CMTA) into law on Tuesday, May 31
- It increases the tax-exempt value of items sent by OFWs to their families in the country via balikbayan boxes
- The act is expected to reduce corruption and technical smuggling, as well as improve revenues
President Benigno Aquino III signed Republic Act No 10863 or the Customs Modernization and Tariff Act (CMTA) on Tuesday, May 31, which increases the tax-exempt value of items sent via balikbayan boxes by overseas Filipino workers (OFW) to their families in the country.
With CMTA signed into law, corruption in the Bureau of Customs (BOC) and technical smuggling in the country is expected to be reduced, and consequently improve revenues, as it establishes a cashless, faceless, and paperless environment, as per an article published by GMA News.
Under this law, OFWs can send up to three P150,000-worth of tax and duty free balikbayan boxes in a year, as long as the goods are not in commercial quantities nor intended for barter, sale or for hire.
Returning OFWs can also benefit from tax-exemptions on personal and household items they would like to bring back home, as per an article published by Rappler.
For OFWs who lived abroad for 10 years, they will be entitled to a P350,000 tax exemption. P250,00 tax exemption will be enjoyed by those who lived overseas for at least 5 years while those who have worked abroad for less than 5 years will be given P150,000 tax- and duty-free ceiling.
The law also raises the de minimis value from P10 to P10,000. The de minimis value refers to the value of tax and duty free goods as well as the minimum cost required for items to undergo formal entry via the BOC.
Senator Sonny Angara, who sponsored CMTA, thanked President Aquino for signing the bill, and his fellow legislators for the passage of the bill into law.
“With the increase in the values, we lessen the discretion of the Customs officials to inspect goods and collect taxes, thus minimizing cases of corruption and smuggling,” said Angara.