Remove de minimis in e-commerce, retailers push
MANILA, Philippines — The head of a local retail trade association is calling for the repeal of de minimis provisions in the country’s e-commerce regulations, arguing that they foster unfair competitive practices.
Philippine Retailers Association president Roberto Claudio said the provision gives foreign online sellers an unfair advantage over local retailers, as it exempts low-value imports from duties and taxes, effectively undercutting domestic businesses.
“The De Minimis Law was crafted when e-commerce was not yet a global retailing platform,” he told the Inquirer.
As the name suggests, the de minimis principle, in terms of taxation and trade, exempts from taxes and duties imports of minimal value (de minimis).
READ: Retailers call for VAT on physical goods sold on Lazada, Tiktok, Shopee
In Philippine trade, it was adapted to simplify cross-border trade by allowing consumers to purchase goods, valued, for example, at P10,000 or less at current rates, without having to pay additional taxes or customs duties.
But as the principle evolved in modern trade, exporters gain at the expense of importing countries that don’t collect duties and taxes and local businesses that cannot compete with the pricing of imports.
Claudio noted that the European Union scrapped its de minimis threshold in 2023 to address concerns over unfair trade practices.
Emerging trends
He added that even the United States has come to recognize that it was allowing the duty-free entry of Chinese goods, bypassing value-added tax and customs fees.
He emphasized that the continued local implementation of the de minimis principle creates an uneven playing field, putting traditional retailers at a significant disadvantage against foreign online sellers.
“We are now drafting the request for the government to repeal the De Minimis law,” he said.
According to the e-Conomy SEA report by Google, Temasek, and Bain & Company released last year, the Philippines’ overall digital economy, measured in terms of gross merchandise value (GMV), managed to grow by 20 percent to $31 billion from $26 billion in 2023.
The Philippines’ e-commerce sector is projected to reach a GMV of $60 billion by 2030.
