“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.
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.