Excise tax to still cover imported cigarettes, liquor in small quantities

Cigaretts and liquor sold at a supermarket. (AFP FILE PHOTO)

MANILA — Small quantities of cigarettes and liquors brought into the country will still be slapped excise tax, according to the Department of Finance.

In a statement on Wednesday, Finance Undersecretary Antonette Tionko said the recently issued Customs Administrative Order (CAO) No. 2-2016 that raised the tax-exempt value of non-commercial imports to P10,000 still provided that de minimis importations of tobacco goods, wines and spirits would remain subject to excise tax, pursuant to the Tax Code.

Finance Secretary Carlos G. Dominguez III and Customs Commissioner Nicanor E. Faeldon signed CAO 2-2016 in September.

CAO 2-2016 is one of the guidelines implementing Republic Act No. 10863 or the Customs Modernization and Tariff Act (CMTA). In relation to the implementation of the CMTA, the BOC has issued the implementing rules and regulations for the establishment of an advance ruling system for valuation and rules of origin.

In Customs Memorandum Order (CMO) No. 28-2016 subsequently issued by the Bureau of Customs on Nov. 14, Faeldon clarified that “importations of wines, spirits and tobacco, whether by air or sea, or bought from an establishment other than from Duty Free Philippines, shall be subject to excise tax regardless of value.”

According to Faeldon, “purchases of 200 cigarettes or 50 cigars and two liters of wine or one liter of spirits brought in by passengers shall not be subject to duty or tax, provided that these products fall within the de minimis value.”

In general, “any imported goods which exceeded the de minimis value shall be dutiable and subject to tax for the full dutiable amount,” CMO 28-2016 read.

“The de minimis value rule covers all importations for consumption entered through various modes such as postal consignments, passenger baggage, consolidated shipments, express consignments and on-board couriers transported through air or sea,” it added.

Also, “allowable limits carried by a passenger bought at Duty Free Philippines, and within the de minimum value shall be exempted from duties and taxes,” although “goods in excess of the allowable limits shall be subject  to excise tax, whether they fall under the de minimis value or not.”  SFM