TARIFF AND CUSTOMS CODE OF THE PHILIPPINES, as amended by
Protect consumers and manufacturers, as well 
 as,
the CUSTOMS MODERNIZATION AND TARIFF ACT (RA 10863, which
took effect on June 16, 2016)
a. TARIFF AND DUTIES
1. Definition
Tariff- is the list or schedule of articles in which a duty is
imposed upon the importation into the country with the
rates at which they are severally taxed. It is the system of
imposing duties or taxes on the importation of foreign
merchandise.
It includes customs duties, toll or tribute payable upon
merchandise to the general government; rate of customs; or
list of articles liable to duties.
Customs duties
It is the name given to taxes on the importation and
exportation of commodities, the tariff or tax assessed upon
merchandise imported from, or exported to, a foreign
country.
NOTE: Tariffs and customs are used interchangeably.
Tariff is a book of a rates which lists down the different kinds
of articles or merchandise along with the duties imposed
upon the same;
The duties payable on articles or merchandise imported or
exported, otherwise called customs duties.
2. PURPOSE OF IMPOSITION
They are imposed to:
1. Raise government revenues 

2.
Philippine products. 

3. KINDS OR CLASSIFICATION OF DUTIES
a. Ordinary/regular duties- these are taxes
imposed or assessed upon merchandise from or
exported to a foreign country for the purpose of
raising revenues.
a.1 ad valorem duties imposed on imported
articles that enter the Philippines in accordance
with the schedules and classification provided
under the Tariff and Customs Code of the
Philippines (TCCP).
- computed on the basis of value of imported
article.
a.2 specific duties are customs duties that are
computed on the basis of dutiable weight of
good i.e. unit of measure such as kg, per liter, etc.
b. Special duties- levied on imported articles in
addition to the regular import duties; generally
imposed to protect our local industries against
unfair foreign corporation.
Anti- dumping duty- special duty imposed on the
importation of articles into the Philippines at less
than its normal value when destined for
domestic consumption in the exporting country,
which is the difference between the export price
and the normal value of such articles.
1
 Countervailing duty- special duty imposed on
imported articles which are granted any kind or
form or subsidy by the government in the
country of origin or exportation, the importation
of which has caused or threatens to cause
material injury to a domestic industry or has
materially retarded the growth or prevents the
establishment of a domestic industry.
Marking duty- this is imposed on imported
articles that are not properly marked as to the
country of origin of such articles in accordance
with the requirements set down by the Code.
Retaliatory/discriminatory duty- this is imposed
on imported articles whenever their country of
origin imposes any unreasonable charge or
limitation which is not equally enforced upon the
like articles of every foreign country, or
discriminates against the commerce of the
Philippines.
Safeguard measures- are emergency measures
including tariffs to protect domestic industries
and producers from increased imports which
inflict or could inflict serious injury on them.
4. FLEXIBLE TARIFF CLAUSE
- Refers to the power of the President under Sec. 1-2
(u) of the CMTA which is the enabling law that made
effective the delegation of the taxing power to the
President under the Constitution.
- Upon the recommendation of the NEDA the
President has the power to:
1. To increase, reduce or remove existing
protective tariff rates of import duty, but in no
case shall be higher than 100% ad valorem;
2. To establish import quota or to ban importation
of any commodity as may be necessary; and
3. To impose additional duty on all import not
exceeding 10% ad valorem, whenever necessary.
(sec. 1608, CMTA).
Limitations imposed on the flexible tariff clause
1. Before any recommendation is submitted by
NEDA to the President, except in the imposition
of an additional duty not exceeding 10% ad
valorem, the Commission shall conduct an
investigation and hold a public hearing to give
reasonable opportunity for any interested party
to produce evidence and be heard. The
Commission shall also hear the views and
recommendations of any government office,
agency or instrumentality concerned. The
Commission shall also hear the views and
recommendations of any government office,
agency or instrumentality concerned. The
Commission shall submit their findings and
recommendations to the NEDA within 30 days
after the termination of the public hearings. The
NEDA thereafter submits its recommendation to
the President. (Sec. 1680b CMTA)
2. The power of the President to increase or
decrease the rates of import duty within the
abovementioned limits shall include the
modification in the form of duty. In such a case,
the corresponding ad valorem or specific
equivalents of the duty with respect to the
2
 imports from the principal competing foreign
country for the most recent representative
period shall be used as basis.
3. Any order of the President pursuant to this
section imposition of additional duty not
exceeding 10% ad valorem which shall take
effect at the discretion of the President.
4. The power delegated to the President as
provided for in this section shall be exercised
only when the Congress is not in session.
5. The power herein delegated may be withdrawn
or terminated by Congress through a joint
resolution.
B. REQUIREMENTS OF IMPORTATION
1. Beginning and ending of importation
Importation begins when the carrying vessel or aircraft enters the
Philippine territory with the intention to unload therein.
Importation is deemed terminated when the duties, taxes and other
charges due upon the goods have been paid or secured to be paid at
the port of entry or in case the goods are deemed free of duties, taxes
and other charges, when the goods have legally left the jurisdiction
of the Bureau. (Sec. 103, CMTA).
The importance to know when the importation begins and ends
The jurisdiction of BOC to enforce the provisions of TCC including
seizure and forfeiture also begins from the beginning of importation.
BOC loses jurisdiction after importation is deemed terminated.
2. OBLIGATIONS OF IMPORTER
a. Cargo manifest
Manifest- It is a listing of the passengers or cargoes carried by a vessel
or aircraft, whether engaged in the coastwise or foreign trade.
Requirement of manifest:
A manifest in coast wise trade for cargo and passengers transported
from one place or port in the Philippines to another is required when
one or both of such places is a port of entry.
Manifests are also required of a vessel from a foreign port.
Cargo manifest- a document used in shipping, containing the list of
the contents, value origin and destination of the goods to be shipped.
Unmanifested cargo is subject to forfeiture whether the act of
smuggling is established or not under the principle of res ipsa
loquitur. It is enough that the cargo was unmanifested and that there
was no showing that payment of duties thereon had been made for
it to be subject to forfeiture.
b. Import entry
It is a declaration to the BOC showing the description, value, tariff
classification and other particulars of the imported article to enable
the customs authorities to determine the correct customs duties and
internal revenue taxes due on the importation.
GR: All imported articles shall be subject to formal or informal entry.
XPN: Except containers for re-export subject to conditionally free-
importation.
Persons authorized to make import entry
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.
Period for filing import entry
3
Imported articles must be entered in the custom house at the port of
entry within 30 days, which shall not be extendible form the
discharge of the last package from the vessel or aircraft.
“discharge of the last package”
it I when the unloading of the shipment from the carrier is completed.
In case of transshipment, the discharge of the last package from the
vessel or aircraft.
c. Declaration of correct weight or value
Consumption entry
It is a government form accomplished by an importer or his
representative which is ultimately submitted to the proper office of
the BOC as a basis for inspection of the importations of an importer
and for the computation of the correct customs duties and internal
revenue taxes due on importation.
d. Liability for payment of duties
The Philippines adopts the “self-assessment” system. Thus, it is the
importer which initially determines the customs duties and other
charges due him and pays the same. However, his computation and
payment is subject to the review of the taxing authorities.
e. Liquidation of duties
It is the final computation and ascertainment by the Collector of
Customs of the duties due on imported merchandise based on official
reports as to the quantity, character and value thereof, and the
Collector of Customs’ own finding as to the applicable rate of duty. It
is akin to an assessment of internal revenue taxes under the NIRC
where the tax liability of the taxpayer is definitely determined.
An assessment or liquidation by the BOC attains finality and
conclusiveness 3 years from the date of the final payment of duties
except when:
-there was fraud;
there is a pending protest; or
the liquidation of import entry was merely tentative.
f. Keeping of records
Compliance audit under the Tariff and Customs Code
The BOC shall examine, inspect and verify the books, records and
documents necessary or relevant for the purpose of collecting the
proper duties and taxes.
Required from the importer for purposes of compliance audit
All importers are required to keep at their principal place of business,
in the manner prescribed by regulations to be issued by the
Commissioner of Customs and for a period of 3 years from the date
of importation all the records of their importations and/or books of
accounts, business and computer systems and all customs
commercial data including payment of records relevant for the
verification declared by the importers/customs brokers on the
import entry.
C. ACCRUAL AND PAYMENT OF TAX AND DUTIES
1. GR: Except as otherwise provided, all goods imported into the
Philippines shall be subject to duty upon importation, including goods
previously exported from the Philippines.
Unpaid duties, taxes and other charges shall incur legal interest of
20% per annum computed form the date of final assessment under
Sec. 429 of the CMTA, when payment becomes due and demandable.
The legal interest shall likewise accrue on any fine or penalty
imposed.
a. Taxable importations
4
All articles when imported from foreign country including those
previously exported from the Philippines are subject to duty
unless otherwise specifically provided for in the TCCP.
b. Prohibited importations
1. Written or printed articles in any form containing any matter
advocating or inciting treason, or rebellion insurrection,
sedition, against the Government of the Philippines, or
forcible resistance to any law of the Philippines, or containing
any threat to take the life of, or inflict bodily harm upon any
person in the Philippines.
2. Goods, instruments, drugs and substances designed,
intended or adapted for producing unlawful abortion, or any
printed matter which advertises, describes or gives direct or
indirect information where, how or by whom unlawful
abortion is committed;
3. Written or printed goods, negatives or cinematographic film,
photographs, engravings, lithographs, objects, paintings,
drawings, or other representation of an obscene or immoral
character;
4. Any article manufactured in whole or in part of gold, silver or
other precious metals or alloys and the stamp, brand or mark
does not indicate the actual fineness or quality of the metals
or alloys;
5. Any adulterated or misbranded food or goods for human
consumption or any adulterated or misbranded drug in
violation of relevant laws and regulations;
6. Infringing goods as defined under the Intellectual Property
Code and related laws; and
7. All other articles and parts thereof, the importation and
exportation are explicitly prohibited by law or rules and
regulations issued by competent authority.
Restricted Importation and Exportation
1. Dynamite, gunpowder, ammunitions and other explosives,
firearms, and weapons of war, and parts thereof;
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
goods when such distribution is dependent on chance,
including jackpot and pinball machines or similar
contrivances, or parts thereof;
3. Lottery and sweepstakes tickets, except advertisements
thereof and list of drawings therein;
4. Marijuana, opium, poppies, coca leaves, heroin or any other
narcotics or synthetic drugs which are or may hereafter be
declared habit forming by the President of the Philippines, or
any compound, manufactured salt, derivative or preparation
thereof, except when imported by the government of the
Philippines to any person dully authorized by the dangerous
drugs board for medicinal purposes;
5. Opium pipes or parts thereof, of whatever material; and
6. Any other goods whose importation or exportation are
restricted.
c. De minimis importations (small value importations)
If the value of an importation does not exceed P10K (TCCP:P10)
there will be no duties and taxes that will be collectible by the
BOC. This threshold value is subject to review by the Finance
Secretary every three years to account for inflation.
d. Conditionally-free and duty-exempt importations
d.1. returning residents- nationals who have stayed in a
foreign country for a period of at least 6 months.
d.2 conditions for exemption from tax and duties (aside
from the requirement that the importation should neither be
of commercial quantity nor intended for barter, sale or hire):
5
 1. for those who have stayed in a foreign country for a period
of at least 10 years- FOB or FCA value shall not exceed P350K
and the privilege is not availed of within 10 years prior to the
returning resident’s arrival.
2. For those who have stayed in a foreign country for a period
of at least 5 years- FOB or FCA shall not exceed P250K and
the privilege is not availed of within 5 years prior to the
returning resident’s arrival.
3. for those who have stayed in a foreign country for a period
less than 5years- FOB or FCA value shall not exceed P150k
and the privilege is not availed of within 6 months prior to
the returning resident’s arrival.
--these threshold values are subject to review by the Finance
Secretary every 3 years to account for inflation.
Returning OFWs shall have the privilege to bring in tax and duty free
home appliances and other durables (limited to one of every kind)
once in a given calendar year accompanying them on their return or
arriving within a reasonable time (not exceeding 60 days after every
returning OFW ‘s return).
d.3 balikbayan box
residents of the Philippines, OFWs or other Filipinos, while
residing abroad or upon their return to the Philippines are
allowed to bring in or send to their families or relatives in the
Philippines balikbayan boxes (containing personal and
household effects only) duty and tax free, provided that the
FCA value shall not exceed P150k (TCCP:P10k) and the items
are not in commercial quantities or intended for barter, sale
or for hire. This can be availed of 3 times in a calendar year.
2. GOODS DECLARATION FOR CONSUMPTION
All imported goods will be subject to the lodgment of a goods
declaration (commonly known as entry declaration) depending on
the purpose (e.g. consumption, warehousing, conditional
importation).
Goods declarations for consumption are cleared through:
a. formal entry (general rule)
informal entry, in the ff. instances:
- goods of a commercial nature with FOB or FCA value
of less than P50K; or
- personal or household effects or goods, not in
commercial quantity, imported in passenger’s
baggage or mail.
b. Filing of goods declaration
A goods declaration must be lodged within 15 days from notice,
extendible for another 15 days, informing the importers of the date
of discharge of the last package from the vessel or aircraft.
c. Assessment and payment of duties and taxes, interest and
surcharge
Once lodged, the BOC, after its examination, shall issue a notice of
assessment of duties and taxes payable. The importer has a period of
15 days from receipt of said notice within which to pay the
corresponding duties and taxes. 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 1 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.
After payment of duties and taxes, the importer has a non-extendible
period of 30 days to claim the goods from custom custody.
d.Provisional goods declaration
The CMTA now allows the lodging of a PROVISIONAL GOODS
DECLARATON (PGD) if, at the time of importation, an importer does
6
not have all the information or supporting documents required to
complete a goods declaration. In this case, an importer has 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.
The CMT permits the filing of an amended goods declaration for valid
reasons and with the approval of the BOC. The amendment,
however, must be done prior to final assessment or examination of
the goods by the BOC.
e. Relief consignment
Relief consignment- goods such as food, medicine, equipment and
materials for shelter, donated or leased to government institutions
and accredited private entities for free distribution or use of victims
of calamities.
Upon a declaration of calamity the clearance of such goods will be a
matter of priority, and subject to simplified customs processes, faster
clearance, and minimal inspection.
f.Misdeclaration, misclassification and undervaluation in goods
declaration
f.1. definition and distinction
Misdeclaration – the discrepancy pertains to quantity, quality,
description, weight, or measurement of the imported goods;
Misclassification- exists when insufficient or wrong description of the
goods or use of wrong tariff heading was declared resulting in a
discrepancy.
Undervaluation is present when: (1) the declared value fails to
disclose in full the price actually paid or payable or any dutiable
adjustment to the price; or (2) when an incorrect valuation method
is used; or (3) the valuation rules are not properly observed.
f.2. Imposition of surcharge
Any misdeclaration, misclassification or undervaluation of imported
goods resulting in discrepancy (in duty and tax to be paid) between
what is legally determined upon assessment and what is declared will
be subject to a 250% fixed surcharge rate of the duty and tax due.
If the misdeclaration, misclassification or undervaluation is
intentional or fraudulent, a 500% surcharge will be imposed.
Surcharge will not be imposed when:
1. The discrepancy in duty is less than 10%; or
2. The importer’s declared value and/or tariff
heading/classification:
a. Relied on an official government ruling; or
b. Is rejected in a formal custom dispute settlement process
involving difficult or highly technical questions relating to
the application of customs valuation rules and/or tariff
classifications.
D. UNLAWFUL IMPORTATION OR EXPORTATION (EXCLUDE:
PENALTIES)
SMUGGLING refers to the:
- fraudulent act of importing any goods into the Philippines; or
- the act of assisting on receiving, concealing, buying, selling,
disposing or transporting such goods, with full knowledge that the
same has been fraudulently imported; or
- the fraudulent exportation of goods.
1. Technical smuggling and Outright smuggling
Technical smuggling- act of importing goods into the country by
means of a fraudulent, falsified or erroneous declaration of the goods
as to its nature, kind, quality, quantity or weight.
Outright smuggling- act of importing goods into the country without
complete customs-prescribed importation documents, or without
being cleared by customs or other regulatory government agencies.
7
 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

Fraudulent practices considered as criminal offenses against Customs

Revenue Laws
1. Unlawful importation
2. Entry of imported or exported article by means of any false
or fraudulent practices, invoice, declaration, affidavit or
other documents
3. Entry of goods at less than their true weights or measures or
upon a classification as to quality or value.
4. Payment of less than the amount due.
5. Filing of any or fraudulent claim for the payment of drawback
or refund of duties upon the exportation of merchandise.
6. Filing of any affidavit, certificate or other document to secure
to himself or others the payment of any drawback, allowance
or refund of duties on the exportation of merchandise
greater than that legally due thereon.

E. REMEDIES
1. Government
a. Administrative/ extrajudicial