A group of retailers asked the government to abolish the “de minimis” rule for imported goods valued at P10,000 and below.
The Philippine Retailers Association (PRA) said in a statement the rule exempting imports valued at P10,000 or below from duties and taxes had detrimental impact on local businesses, consumers and the government.
The Department of Trade and Industry (DTI) announced in 2016 that imported goods valued at P10,000 and below would no longer be subject to duties and taxes, pursuant to the de minimis provision of the Customs Modernization and Tariff Act (CMTA) or Republic Act No. 10863.
Imported goods within the de minimis value are entitled to immediate release under RA 10863.
The Bureau of Customs was also mandated to process importations at de minimis value using a simplified and electronic system to allow advance clearance and ensure proper customs monitoring and control.
The PRA said, however, the policy, designed to streamline trade processes, had become outdated amid the rapid growth of e-commerce and globalization.
It also said the de minimis value creates an uneven playing field, putting local retailers who diligently pay taxes at a disadvantage to foreign e-commerce merchants who may not adhere to the same regulations.
The group said this created unfair competition and negatively impacts various industries within the retail sector.
It also said the influx of tax-exempt goods, particularly through e-commerce, deprives the government of significant revenue and undermines fair tax principles.
The de minimis value facilitates the entry of counterfeit and substandard products, jeopardizing consumer safety and product quality standards, the PRA said.
The PRA proposed removing the de minimis value as a strategic measure to promote economic development.
It said this would ensure fair competition, increase government revenue and enhance fairness and equity within the retail sector by creating a level playing field for all businesses.
The move will also safeguard consumer safety and product quality by curbing the influx of counterfeit and substandard goods, it said.
The removal of the de minimis value is a part of international best practices in trade facilitation and consumer protection, it said.