Customs Duty and Tax Computation in The Philippines

“All articles, when imported from any foreign country into the Philippines, shall be subject to duty upon each importation, even though previously exported from the Philippines, except as otherwise specifically provided in this Code or in other laws.”

- Section 101: Imported Articles Subject to Duty of Republic Act No. 1937 also known as “The Tariff and Customs Code of the Philippines

Duties on Imports

You pay tax when you buy a meal. Your utility service providers charge you with government taxes every month. Same when you are employed. Government deducts tax from your salary. And when you import goods, or let’s say a relative, a family member or a friend sent you a gift from another country, you might pay tax as well. And, that is an inevitable fact.

See the emphasis I apply on the word ‘might’. I used it to clear that even though your package was held by customs, it doesn’t mean that you’ll pay tax 100%. Who knows? A courier may knock on your house door anytime. Anyhow, you can consider both of these possibilities. That’s why in this post, I’ll be sharing how to compute tax, so you can estimate the amount you might pay.

If you are planning for the first time to shop online or import goods for commercial purposes, the guide on the next pages is helpful in estimating tax.

Terminology

Before moving to the next section, let me just introduce the two common terms I’ll use in this post. The first one is tax and the second one is duty.

If you noticed, I mentioned the word tax many times in the first section of this article because Filipinos, as per my observation from an old related article, prefer to use it. However, duty is actually the more appropriate term to use when referring to tax on imports. Now, starting in the next section, I’ll use the word ‘tax’ to refer to value-added tax alone.

Somehow, the two terms are the same since they are both a form of tax, and to compute the total duty (or total tax), you need to sum customs duty, value-added tax, also known as VAT, and other fees.

Now, let’s take a look on how to compute the total duty of imports.

Comments

  1. By Paul on

    If the invoice is not present in the package, customs usually get the price in the market to compute. They really do that. just like in airport, if you have taxable items and you don’t have the invoice with you, they will get its value in the market. It can be lower or higher than the actual price. So its best that invoice must be presented. In case of packages, you must ask the supplier to attach the invoice.

    Total Duties and Taxes may vary because of the exchange rate and Rate of Duty. Exchange Rate changes i think every week, then rate of duty may change also because of trade agreements to other countries (Tariff Commission is responsible on that). Your DVD might be only 5% in the coming years.

    Nice article! :)

  2. By Dancing Bear on

    one thing, like between year 2007 and 2010 – I used to get 1-2 packets for toy collectibles every month. Then there was one day I won quite a large package from eBay the size of a balikbayan box. The amount was only $173 – there was a paper invoice from the seller and proof from eBay and paypal of the amounts paid for such and such items. I bet you can’t guess what the customs in Pasay post office did to my package? They opened it up, inspected each item and made their own assessment of the prices for the individual items. disregarding my proof of purchase that it was an auction sale. What’s more surprising. They know me and have a history of my parcels.

  3. By Ryan Ching on

    HI, Ryan Ching here… I bought an LP Nendorid toy from ami-ami online store in Japan.. favor, can you possibly compute for my cusom duties and tax?
    LINKIN PARK Set | 3,210
    Shipping fee: 1380

    TOTAL: 4590 JPY (convert x0.5352 = P2,456.57

Trackbacks

  1. […] Tax and freight charges have been a problem for Philippine gamers for quite some time now. The high cost of customs duty and tax in the Philippines sometimes result in the recipient having to pay an extra fee amounting to 100 per cent or more of the item purchased, making it very expensive to order from abroad. Sometimes, shipments also get delayed, damaged, or worse, lost, which is why it is imperative that players only purchase from trusted retailers to avoid any more hassles, hidden charges or extra costs. […]

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