Professional Documents
Culture Documents
NOTE: Tariffs and customs are used interchangeably. b. Special duties- levied on imported articles in
addition to the regular import duties; generally
Tariff is a book of a rates which lists down the different kinds imposed to protect our local industries against
of articles or merchandise along with the duties imposed unfair foreign corporation.
upon the same;
The duties payable on articles or merchandise imported or Anti- dumping duty- special duty imposed on the
exported, otherwise called customs duties. importation of articles into the Philippines at less
than its normal value when destined for
domestic consumption in the exporting country,
2. PURPOSE OF IMPOSITION which is the difference between the export price
They are imposed to: and the normal value of such articles.
1. Raise government revenues
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Countervailing duty- special duty imposed on 1. To increase, reduce or remove existing
imported articles which are granted any kind or protective tariff rates of import duty, but in no
form or subsidy by the government in the case shall be higher than 100% ad valorem;
country of origin or exportation, the importation 2. To establish import quota or to ban importation
of which has caused or threatens to cause of any commodity as may be necessary; and
material injury to a domestic industry or has 3. To impose additional duty on all import not
materially retarded the growth or prevents the exceeding 10% ad valorem, whenever necessary.
establishment of a domestic industry. (sec. 1608, CMTA).
Marking duty- this is imposed on imported Limitations imposed on the flexible tariff clause
articles that are not properly marked as to the 1. Before any recommendation is submitted by
country of origin of such articles in accordance NEDA to the President, except in the imposition
with the requirements set down by the Code. of an additional duty not exceeding 10% ad
valorem, the Commission shall conduct an
Retaliatory/discriminatory duty- this is imposed investigation and hold a public hearing to give
on imported articles whenever their country of reasonable opportunity for any interested party
origin imposes any unreasonable charge or to produce evidence and be heard. The
limitation which is not equally enforced upon the Commission shall also hear the views and
like articles of every foreign country, or recommendations of any government office,
discriminates against the commerce of the agency or instrumentality concerned. The
Philippines. Commission shall also hear the views and
recommendations of any government office,
Safeguard measures- are emergency measures agency or instrumentality concerned. The
including tariffs to protect domestic industries Commission shall submit their findings and
and producers from increased imports which recommendations to the NEDA within 30 days
inflict or could inflict serious injury on them. after the termination of the public hearings. The
NEDA thereafter submits its recommendation to
4. FLEXIBLE TARIFF CLAUSE the President. (Sec. 1680b CMTA)
- Refers to the power of the President under Sec. 1-2 2. The power of the President to increase or
(u) of the CMTA which is the enabling law that made decrease the rates of import duty within the
effective the delegation of the taxing power to the abovementioned limits shall include the
President under the Constitution. modification in the form of duty. In such a case,
- Upon the recommendation of the NEDA the the corresponding ad valorem or specific
President has the power to: equivalents of the duty with respect to the
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imports from the principal competing foreign Manifest- It is a listing of the passengers or cargoes carried by a vessel
country for the most recent representative or aircraft, whether engaged in the coastwise or foreign trade.
period shall be used as basis. Requirement of manifest:
3. Any order of the President pursuant to this A manifest in coast wise trade for cargo and passengers transported
section imposition of additional duty not from one place or port in the Philippines to another is required when
exceeding 10% ad valorem which shall take one or both of such places is a port of entry.
effect at the discretion of the President. Manifests are also required of a vessel from a foreign port.
4. The power delegated to the President as
provided for in this section shall be exercised Cargo manifest- a document used in shipping, containing the list of
only when the Congress is not in session. the contents, value origin and destination of the goods to be shipped.
5. The power herein delegated may be withdrawn Unmanifested cargo is subject to forfeiture whether the act of
or terminated by Congress through a joint smuggling is established or not under the principle of res ipsa
resolution. loquitur. It is enough that the cargo was unmanifested and that there
was no showing that payment of duties thereon had been made for
B. REQUIREMENTS OF IMPORTATION it to be subject to forfeiture.
1. Beginning and ending of importation
Importation begins when the carrying vessel or aircraft enters the b. Import entry
Philippine territory with the intention to unload therein. It is a declaration to the BOC showing the description, value, tariff
Importation is deemed terminated when the duties, taxes and other classification and other particulars of the imported article to enable
charges due upon the goods have been paid or secured to be paid at the customs authorities to determine the correct customs duties and
the port of entry or in case the goods are deemed free of duties, taxes internal revenue taxes due on the importation.
and other charges, when the goods have legally left the jurisdiction
of the Bureau. (Sec. 103, CMTA). GR: All imported articles shall be subject to formal or informal entry.
XPN: Except containers for re-export subject to conditionally free-
The importance to know when the importation begins and ends importation.
The jurisdiction of BOC to enforce the provisions of TCC including
seizure and forfeiture also begins from the beginning of importation. Persons authorized to make import entry
BOC loses jurisdiction after importation is deemed terminated. 1. the importer, being the holder of a bill of lading
2. a duty licensed customs broker acting under authority from
a holder of a bill;
3. a person duly empowered to act as agent or attorney-in-fact
for each holder of the bill of lading.
2. OBLIGATIONS OF IMPORTER Period for filing import entry
a. Cargo manifest
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Imported articles must be entered in the custom house at the port of -there was fraud;
entry within 30 days, which shall not be extendible form the there is a pending protest; or
discharge of the last package from the vessel or aircraft. the liquidation of import entry was merely tentative.
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All articles when imported from foreign country including those 1. Dynamite, gunpowder, ammunitions and other explosives,
previously exported from the Philippines are subject to duty firearms, and weapons of war, and parts thereof;
unless otherwise specifically provided for in the TCCP. 2. Roulette wheels, gambling outfits, loaded dice, marked
cards, machines, apparatus or mechanical devices used in
gambling or distribution of money, cigars, cigarettes, or other
b. Prohibited importations goods when such distribution is dependent on chance,
1. Written or printed articles in any form containing any matter including jackpot and pinball machines or similar
advocating or inciting treason, or rebellion insurrection, contrivances, or parts thereof;
sedition, against the Government of the Philippines, or 3. Lottery and sweepstakes tickets, except advertisements
forcible resistance to any law of the Philippines, or containing thereof and list of drawings therein;
any threat to take the life of, or inflict bodily harm upon any 4. Marijuana, opium, poppies, coca leaves, heroin or any other
person in the Philippines. narcotics or synthetic drugs which are or may hereafter be
2. Goods, instruments, drugs and substances designed, declared habit forming by the President of the Philippines, or
intended or adapted for producing unlawful abortion, or any any compound, manufactured salt, derivative or preparation
printed matter which advertises, describes or gives direct or thereof, except when imported by the government of the
indirect information where, how or by whom unlawful Philippines to any person dully authorized by the dangerous
abortion is committed; drugs board for medicinal purposes;
3. Written or printed goods, negatives or cinematographic film, 5. Opium pipes or parts thereof, of whatever material; and
photographs, engravings, lithographs, objects, paintings, 6. Any other goods whose importation or exportation are
drawings, or other representation of an obscene or immoral restricted.
character;
4. Any article manufactured in whole or in part of gold, silver or c. De minimis importations (small value importations)
other precious metals or alloys and the stamp, brand or mark If the value of an importation does not exceed P10K (TCCP:P10)
does not indicate the actual fineness or quality of the metals there will be no duties and taxes that will be collectible by the
or alloys; BOC. This threshold value is subject to review by the Finance
5. Any adulterated or misbranded food or goods for human Secretary every three years to account for inflation.
consumption or any adulterated or misbranded drug in
violation of relevant laws and regulations; d. Conditionally-free and duty-exempt importations
6. Infringing goods as defined under the Intellectual Property d.1. returning residents- nationals who have stayed in a
Code and related laws; and foreign country for a period of at least 6 months.
7. All other articles and parts thereof, the importation and
exportation are explicitly prohibited by law or rules and d.2 conditions for exemption from tax and duties (aside
regulations issued by competent authority. from the requirement that the importation should neither be
Restricted Importation and Exportation of commercial quantity nor intended for barter, sale or hire):
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1. for those who have stayed in a foreign country for a period the purpose (e.g. consumption, warehousing, conditional
of at least 10 years- FOB or FCA value shall not exceed P350K importation).
and the privilege is not availed of within 10 years prior to the Goods declarations for consumption are cleared through:
returning resident’s arrival. a. formal entry (general rule)
2. For those who have stayed in a foreign country for a period informal entry, in the ff. instances:
of at least 5 years- FOB or FCA shall not exceed P250K and - goods of a commercial nature with FOB or FCA value
the privilege is not availed of within 5 years prior to the of less than P50K; or
returning resident’s arrival. - personal or household effects or goods, not in
3. for those who have stayed in a foreign country for a period commercial quantity, imported in passenger’s
less than 5years- FOB or FCA value shall not exceed P150k baggage or mail.
and the privilege is not availed of within 6 months prior to
the returning resident’s arrival. b. Filing of goods declaration
--these threshold values are subject to review by the Finance A goods declaration must be lodged within 15 days from notice,
Secretary every 3 years to account for inflation. extendible for another 15 days, informing the importers of the date
of discharge of the last package from the vessel or aircraft.
Returning OFWs shall have the privilege to bring in tax and duty free
home appliances and other durables (limited to one of every kind) c. Assessment and payment of duties and taxes, interest and
once in a given calendar year accompanying them on their return or surcharge
arriving within a reasonable time (not exceeding 60 days after every Once lodged, the BOC, after its examination, shall issue a notice of
returning OFW ‘s return). assessment of duties and taxes payable. The importer has a period of
15 days from receipt of said notice within which to pay the
d.3 balikbayan box corresponding duties and taxes. The failure to pay duties and taxes
residents of the Philippines, OFWs or other Filipinos, while within the 15-day period shall result in the imposition of a 10%
residing abroad or upon their return to the Philippines are surcharge (increased to 25% if delinquency lasts for more than 1 year)
allowed to bring in or send to their families or relatives in the based on the total assessed amount or balance thereon as well as to
Philippines balikbayan boxes (containing personal and a 20% interest per annum computed from the date of final
household effects only) duty and tax free, provided that the assessment.
FCA value shall not exceed P150k (TCCP:P10k) and the items After payment of duties and taxes, the importer has a non-extendible
are not in commercial quantities or intended for barter, sale period of 30 days to claim the goods from custom custody.
or for hire. This can be availed of 3 times in a calendar year.
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not have all the information or supporting documents required to f.2. Imposition of surcharge
complete a goods declaration. In this case, an importer has to Any misdeclaration, misclassification or undervaluation of imported
execute an undertaking to complete the necessary information or goods resulting in discrepancy (in duty and tax to be paid) between
submit the supporting documents within 45 days, extendible for what is legally determined upon assessment and what is declared will
another 45 days, from the lodging of the PGD. be subject to a 250% fixed surcharge rate of the duty and tax due.
The CMT permits the filing of an amended goods declaration for valid If the misdeclaration, misclassification or undervaluation is
reasons and with the approval of the BOC. The amendment, intentional or fraudulent, a 500% surcharge will be imposed.
however, must be done prior to final assessment or examination of
the goods by the BOC. Surcharge will not be imposed when:
1. The discrepancy in duty is less than 10%; or
e. Relief consignment 2. The importer’s declared value and/or tariff
Relief consignment- goods such as food, medicine, equipment and heading/classification:
materials for shelter, donated or leased to government institutions a. Relied on an official government ruling; or
and accredited private entities for free distribution or use of victims b. Is rejected in a formal custom dispute settlement process
of calamities. involving difficult or highly technical questions relating to
the application of customs valuation rules and/or tariff
Upon a declaration of calamity the clearance of such goods will be a classifications.
matter of priority, and subject to simplified customs processes, faster
clearance, and minimal inspection. D. UNLAWFUL IMPORTATION OR EXPORTATION (EXCLUDE:
PENALTIES)
f.Misdeclaration, misclassification and undervaluation in goods SMUGGLING refers to the:
declaration - fraudulent act of importing any goods into the Philippines; or
- the act of assisting on receiving, concealing, buying, selling,
f.1. definition and distinction disposing or transporting such goods, with full knowledge that the
Misdeclaration – the discrepancy pertains to quantity, quality, same has been fraudulently imported; or
description, weight, or measurement of the imported goods; - the fraudulent exportation of goods.
Misclassification- exists when insufficient or wrong description of the
goods or use of wrong tariff heading was declared resulting in a 1. Technical smuggling and Outright smuggling
discrepancy. Technical smuggling- act of importing goods into the country by
Undervaluation is present when: (1) the declared value fails to means of a fraudulent, falsified or erroneous declaration of the goods
disclose in full the price actually paid or payable or any dutiable as to its nature, kind, quality, quantity or weight.
adjustment to the price; or (2) when an incorrect valuation method Outright smuggling- act of importing goods into the country without
is used; or (3) the valuation rules are not properly observed. complete customs-prescribed importation documents, or without
being cleared by customs or other regulatory government agencies.
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a.1. search, seizure, forfeiture, arrest
Other fraudulent practices a.2. authority of the Commissioner to make Compromise
Types of valuation frauds b. Judicial
1. undervaluation- reporting lower values than the actual b.1 rules on appeal including jurisdiction
transaction value
2. overvaluation- reporting values higher than the transaction 2.Taxpayer
value a. Protest
3. false invoice description through reporting lower qualities in b. Abandonment
the invoice not identifying branded items as such c. Abatement and refund
4. false country of origin
E. REMEDIES
1. Government
a. Administrative/ extrajudicial