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On 11 June 1978, RA No. 1464 was signed into law (revising PD No. 34),
which, in general, strengthened the punitive force of the TCCP against
smuggling and other forms of customs fraud. Many changes in global
and regional trade policies, rules and processes have since then
developed and evolved which have been addressed (through
legislative amendments of the TCCP and administrative issuances) on a
piecemeal basis. Republic Act (RA) No. 10863, otherwise known as the
Customs Modernization and Tariff Act (CMTA), which amends the Tariff
and Customs Code of the Philippines (TCCP) took effect on 16 June
2016, 15 days after it was published in a major daily newspaper.
(Changes under the Customs Modernization and Tariff Act: An
Overview, Mark Anthony P. Tamayo, accessed at
http://www.bworldonline.com/content.php?
section=Economy&title=changes-under-the-customs-modernization-
and-tariff-act-an-overview&id=128524)
II. Discussion
The new CMTA declares the policy of the state to protect and enhance
government revenue, institute fair and transparent customs and tariff
management that will efficiently facilitate international trade, prevent
and curtail any form of customs fraud and illegal acts, and modernize
customs and tariff administration, taken into consideration the
mandatory standards of the Revised Kyoto Convention, to which the
Philippines is a signatory, international agreements, recommendations
from the business sectors and industry groups as well as some of the
best practices in customs administration, among others. It seeks to
transform the Bureau of Customs (BoC) into a modern and efficient
organization that is at par with global standards. (Sec. 101, Republic
Act 10863)
The CMTA has both saving and repealing clauses. Laws, rules and
regulations previously issued pertaining to the importation of goods
that are consistent with the CMTA will remain valid unless the same be
repealed or amended. While those which are inconsistent are expressly
repealed, amended or modified accordingly. (Secs. 1802, 1803, and
1804 of Republic Act 10863)
1. Declaration of Goods
The failure to pay duties and taxes within the 15-day period shall result
in the imposition of a 10% surcharge (increased to 25% if delinquency
lasts for more than one year) based on the total assessed amount or
balance thereon as well as to a 20% interest per annum computed
from the date of final assessment. (Ibid.)
After payment of duties and taxes, the importer will then have a non-
extendible period of 30 days (previously, 15 days from posting of
notice to claim) to claim the goods from customs custody. (Ibid.)
The new law also allows the lodging of provisional goods declaration if
at the time of importation, an importer does not have all the
information or supporting documents required to complete a goods
declaration. The PGD is a new concept that importers can use
particularly in instances where additional information and/or collateral
documents are required to be submitted at the border. Under this
concept, an importer would have to execute an undertaking to
complete the necessary information or submit the supporting
documents within 45 days (extendible for another 45 days) from the
lodging of the PGD. Goods under PGD may be released upon posting of
a security equivalent to the amount ascertained to be the applicable
duties and taxes. (Sec. 403, Republic Act 10863).
2. De minimis value
The de minimis importation value under the old customs and tariff act
of 1978, which was in effect until May30 this year, was only P10, which
meant that virtually all importations were subject to tax. Under the
new law, no duties and taxes shall be collected on goods with an FOB
or FCA value of ten thousand pesos (10,000.00) or below. The
Secretary of Finance shall adjust the de minimis value as provided
every three (3) years after the effectivity of the Act. (Sec. 423, RA
10863 and Customs Administrative Order No. 02-2016)
The new law also allows travelers to bring in personal valuables with a
minimum of P150,000. R.A. 10863 also allows travelers a maximum of
P350,000, depending on the length of stay abroad. The law provides
that wearing apparel, goods of personal adornment, toilet goods,
portable tools and instruments, theatrical costumes and similar effects
accompanying travelers, or tourists, or arriving within a reasonable
time before or after their arrival in the Philippines, which are necessary
and appropriate for the wear and use of such persons according to the
nature of the journey, their comfort and convenience shall also be
exempt from payment of import duties.
Under the Old Tariff and Customs Code returning residents shall only
exempt for goods whose export value does not exceed five hundred
pesos. (Sec. 101 [i], PD1464).
Under RA 10863, returning residents or nationals shall also be exempt
from payment of import duties on personal and household effects but
this exemption now covers goods up to P350,000.00 in value, provided
that it is not of commercial quality and not intended for sale, hire or
barter.
One of the issues that the new law tries to address is the tedious and
complex customs processes emanating from customs regulations and
practices based on more than 50-year-old policies and laws. The new
law simplifies and harmonizes customs procedures, pushes for full
customs automation, and aligns the TCCP with international standards
and practices, ultimately making it easier for traders, importers and
exporters to comply with border requirements.
6. Stiffer Penalties
http://www.ibtimes.ph/3-things-know-about-new-customs-
modernization-and-tariff-act-signed-2483)