On a purchase of books costing Php 216.50 and shipped by the bookseller to Manila, the Post Office, upon receipt, then issued the following:
Tentative Assesment Sheet
Customs Duty 49.01 Tariff Heading
$396.95 x 46.66 Exchange Rate
Php 18,522 Dutiable Value in peso x 5% Rate of Duty
Php 926 Total Customs Duty
Value Added Tax
Php 18,522 Dutiable Value in peso
Php 926 Customs Duty
Php 250 Customs Documentary Stamp
Php 250 Import Processing Fee
Php 15 BIR Documentary Stamp
___________________________
Php 19,963 Total Taxable Cost x 12% EVAT Rate
___________________________
Php 2,400 Total Payable VAT
XXXXXXXXXXXXXXXXXXXXXXX
SUMMARY
Customs Duty: Php 926
VAT: Php 2,400
IPF: Php 250
Customs Stamp: Php 250
BIR Stamp: Php 15
__________________________
TOTAL Php 3,841.00
Now I have no problem with paying appropriate taxes but are these the proper taxes, in the right amounts? Books are non-VATable items, I thought (see The Unlawyer and despite House proposals to impose VAt on books; and even this). So what gives? This has long been a sore point among purchasers of books and no one seems to be able to give a definitive answer!
__________________________
Update 9/30/08
The relevant legislation appears to be as follows:
1. Republic Act 9337, amending Section 109 of the National Internal Revenue Code, the importation of books and any newspapers, magazines or journals are exempt from value-added tax. To wit:
“Section 109. Exempt Transactions. — Subject to the provisions of subsection (2) hereof, the following transactions shall be exempt from value-added tax:
xxx
(R) Sale, importation, printing or publication of books and any newspaper, magazine, review or bulletin which appears at regular intervals with fixed prices for subscription and sale and which is not devoted principally to the publication of paid advertisements;”
2. Tariff and Customs Code of the Philippines, Section 105:
“Section 105. Conditionally Free Importations. —
xxx
s. Philosophical, historical, economic, scientific, technical and vocational books specially imported for the bona fide use and by the order of any society or institution, incorporated or established solely for the philosophical, educational, scientific, charitable and literary purposes, or for the encouragement of the fine arts, or for the bona fide use of and by the order of any institution of learning in the Philippines: Provided that the provisions of this subsection shall apply to books not exceeding two (2) copies of any one work when imported by any individual for his own use, and not for barter, sale or hire.;”
3. Republic Act No. 8047, otherwise known as the Book Publishing Industry Development Act:
“Section 12. Incentives for Book Development. —
xxx
In the case of tax and duty-free importation of books or raw materials to be used in book publishing, the Board and its duly authorized representatives shall strictly monitor the quality and volume of imported books and materials as well as their distribution and the utilization of the said imported materials.Books, magazines, periodicals, newspapers, including book publishing and printing, as well as its distribution and circulation, shall be exempt from the coverage of the expanded value added tax law.”
The opinion of the BIR is that that the importation of books for personal use is exempt from value added tax as well as from the payment of import duties. The Post Office was informed accordingly and you may want to inform the Post Office of these provisions if you face a similar problem. A small handling fee, is, however, legitimate on the part of the Post Office.
have the flu. will uopdate when i get better.
get well soon, manolo!
One of the most grievous strategic errors that policy makers have committed in the Philippine scenario is the tangential view that macro-economic fundamental solutions can be applied to the Philippine economy. It can’t.
When a country has serious systemic and structural problems in the supply side which results in repeating balance of payments problems applying “Keynesian”
solutions actually exacerbates the problem…
The result of which is clearly and factually documented by the repeating structural adjustment programs imposed by the IMF-WB over the last forty years plus. The repeating need to go back to the IMF for short term BOP support and the resulting continued harsher and harsher WB conditionalities imposed.
The IMF plays the bad cop while the WB played the good cop. The result was the country is now caught in a debt
prison.
The result is a form of economic genocide imposed on the Filipino people.
The Marcos government was already feeling the strong effects of the Volker medicine in the U.S. as he attempted to kill the inflation menace by raising interest rates to double digits that precipitated the debt crisis of the 80’s.
The Marcos government had embraced the McNamara’s
grand plan of the SAP by utilizing the transfer of the surplus of the oil producing countries hoard of dollars through the intermediation of the money center banks of the U.S. to the then countries under the control of the IMF-WB.
Someone one day will write a complete history in the chapter of financial colonization of certain developing markets that entered a new phase during that period.
The Philippines is still trapped in that system…
The international trading system has been co-opted by the U.S. through the almost monopoly control of the contract settlement of international trade in their currency.
No dollar -no- international trade.
It is an old word fact that whoever controls the financial system controls trade.
In 1972-73 we started shipping out human labor to pay for our imports of oil.
Lugi si Obama. The Republicans now have a US$700B campaign fund disguised as Wall Street bailout 🙂
Hi Manolo,
It’s good that the matter was resolved in your favor. Normally, customs officers will assess books based on the standard tariff and will tend to overlook the exemptions, if its not clearly stated in the commercial invoice. A historical material should be declared as such to make the examiner’s job easier.
Another matter is the natural tendency to asses the books based on the normally high tariff rate. Customs collections from books should have declined due to the people’s increasing use of the internet to download e-books, making it quite burdensome for examiners who needs to present high tariff collections.
This is in no way a justification of the erroneous assessment but rather, an attempt to speculate on what really happened.
mine is, you may not pay duties and taxes the books sent to you thru mail or by balik bayan box pursuant to sec. 105s of tccp and other laws, provided, procedure are to be followed, such, 1. get a certification from DECS and 2. apply an exemption to department of finance (DOF)requesting in your favor to release to you your books without paying duties and taxes, if the DOF find your request complied with all the requirements, the DOF will issue an indorsement pertaining to your request addressed to the district collector of customs citing the said shipment may released tax and duty free subject to the bureau of customs (BOC) appropriate action, the customs officer now will issue a 2nd indorsement, if after all requirements and procedure are rendered thats the time you can have your book free of duties and taxes but you are not exempt from payment of import processing fee.