DOF studies scrapping tax break on P10,000 imports

The Department of Finance (DOF) is studying whether to end the exemption from duties and taxes on imported goods valued at P10,000 or less, Finance Undersecretary Karlo Fermin Adriano told reporters. The review could affect Filipinos who buy low-cost items from overseas sellers on online platforms such as Shopee and Lazada.

Adriano said the exemption puts local manufacturers at a disadvantage, since goods bought locally generally carry value-added tax (VAT) whatever their price. He called it revenue leakage in e-commerce, saying foreign sellers gain an edge because low-value shipments arrive with no tariff or VAT. He added that there is a global trend toward removing such exemptions, and that some countries already use lower thresholds.

Some goods worth more than P10,000 are reportedly being declared as low-value shipments, the report said. That makes it hard to compute the right taxes or estimate lost revenue. The DOF has asked the International Monetary Fund to help estimate revenue from removing the exemption, including a scenario where only VAT is charged.

Roberto Claudio, Sr., chairman of the Philippine Retailers Association, said in September that the group had already raised its concerns with government agencies and pushed for removing the rule.

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