BOC urged to scrap de minimis rule
A local trade association of retailers has formally petitioned the Bureau of Customs (BOC) to scrap the de minimis rules on imported goods, ramping up its push to remove the tax exemption threshold that allows small-value shipments to enter the country duty-free.
In a position paper dated May 6 sent to the BOC, the Philippine Retailers Association (PRA) outlined its concerns about the current policy and its impact on local businesses, especially in light of the booming e-commerce sector.
“We believe that revisiting this policy is crucial to restoring fair competition, protecting local industries, and improving government revenue,” the PRA said in the document.
E-commerce
The PRA argues that the existing de minimis rule, which exempts imported goods valued at P10,000 or less from duties and taxes, places local retailers at a significant disadvantage, allowing foreign products to flood the market without contributing to the country’s tax base.
The association also pointed out that countries like the European Union (EU) and the United States have either adjusted or eliminated their de minimis rules in response to similar concerns.
For instance, it said that the EU removed the threshold altogether due to widespread abuse, while the United States has suspended its application for goods valued at or below $800.
The PRA also raised concerns about the influx of counterfeit and low-quality goods entering the market under the current rule.
The trade group said that removing the de minimis exemption would protect consumers and local industries from unfair competition, and help ensure that goods entering the country meet safety standards.
Further, the PRA said the removal of the de minimis rule would also align with the country’s economic nationalism policies, which prioritize the protection of Filipino labor and locally produced goods.
Additionally, it said the Philippine government could increase revenue while leveling the playing field for local retailers, who have long been at a disadvantage due to the current policy.
With the local retail industry projected to grow by 5 to 10 percent this year, reaching an estimated P5 trillion in gross value, the PRA views this measure as essential to safeguarding the industry’s competitiveness and long-term growth.
