Outgoing President Benigno Aquino III on Monday signed into law a measure that aims to modernize the Bureau of Customs, curb smuggling and grant tax-free privileges to most “balikbayan” boxes.
Republic Act No. 10863, or the Customs Modernization and Tariff Act, will update the Tariff and Customs Code which was last amended in 1978 and enhance the operations of the Customs Bureau, the government’s second largest revenue-collecting agency in charge of collecting import duties.
The law has a provision raising the amount of tax exemption for a “balikbayan” box to P150,000 from the previous P10,000. The same amount of exemption will be granted to returning overseas Filipino workers.
The Finance Department said in a statement the law would also improve the agency’s goal to curb smuggling as this would discourage person-to-person transactions between Customs employees and importers.
“President Aquino signing CMTA into law has set the Bureau of Customs on an even faster pace of reform. Embracing technology and updating regulatory frameworks reduces opportunities for corruption and streamlines client experience with the BOC,” Finance Secretary Cesar Purisima said.
“Better institutions deliver better outcomes. We look forward to a stronger, more efficient BOC aiding our bid for trade liberalization and competitiveness,” Purisima said.
Customs commissioner Alberto Lina said the law was another “milestone” for their call to institutionalize reforms in the agency.
“Emphasizing the ease of trade through streamlined processes, the CMTA will establish the requisite foundation for a cashless, faceless and paperless environment in Customs, reducing corruption and technical smuggling that will result in enhanced revenues,” Lina said.
“Efforts are already underway to attune current BOC systems to the new provisions in the CMTA focused on business process re-engineering, computer-based systems development, organizational development, capacity building, and external communication and education,” Lina said.
Among the reforms prescribed by the new law are electronic processing of shipment of documents, streamlining of export and import procedures, simplified processes for seizure and disposition of illegal goods and steeper penalties for violations.
The CMTA also exempts Customs employees from the Salary Standardization Law (SSL) that will grant them relatively higher pay than most other government workers.
Another key provision is the increase in the de minimis value to P10,000 from P10 for articles brought into the country duty-free through the postal office, by courier companies, or by hand.
The measure also provides for an automatic indexation of the amounts every three years to account for inflation.