Duty Free PHL wants current duty-free shopping limit by foreign arrivals, ‘balikbayan’ doubled

DUTY Free Philippines Corp. (DFPC) COO Lorenzo Formoso is batting for a doubling of arriving passengers and overseas Filipino workers (OFWs) current duty-free shopping limit, and prolonging the period of using this privilege, intending to include this request in a position paper to President-elect Rodrigo R. Duterte.

This has been spurred by the passage of the Customs Modernization and Tariff Act (CMTA), which raised the tax-exemption ceiling of balikbayan boxes from P10,000 to P150,000, thereby encouraging Filipino expats to increase purchases abroad.

The privilege can only be enjoyed up to three times in a calendar year.

Formoso said that as a result of this legislation, they’re aiming to equally increase the duty-free allowance of OFWs and arriving passengers to shift purchasing activities here.

“We want to increase because our [allowance] is currently $1,000, and that has been there for about 20 years na. We can use [the passage of the CMATA] as a basis to say instead of our balikbayan bringing in all these pasalubong from abroad here, why don’t we just keep the business and foreign exchange within the Philippines? Our prices anyway are very competitive,” Formoso said at the sidelines of the 2016 Outstanding Filipino Retailers and Shopping Centers Awards of the Philippine Retailers Association (PRA) held on Thursday night at the Marriott Grand Ballroom.

“If you are allowing people to bring in merchandise abroad duty-free, dapat payagan din taasan ang duty-free purchases, as all our net profits go to the Department of Tourism for their promotion projects,” he said.

Formoso added that the legal division of state-owned DFPC is drafting a paper to submit to the incoming administration, containing this request of increasing to possibly double the maximum exemption threshold for OFWs and regular Filipino travelers.

DFPC is under the Bureau of Customs and, according to the rules on duty-free shopping, returning OFWs are entitled to a tax-exempt maximum purchase of $2,500.

Aside from OFW duty-free privileges, returning regular Filipino travelers are also entitled to a maximum-exemption purchase amounting to $1,000, but only within 48 hours of arrival.

Aside from increasing this, Formoso said he wants to request to extend the period of availment from 48 hours to at least a week.

Moreover, the COO is vying for the removal of value-added tax (VAT) on liquor and cigarettes, as he reasoned this provision is not in the “sin” tax law.

Formoso added that the state-owned enterprise pays about P400 million yearly in VAT payments on these two products.

“Hopefully, the new administration can consider this,” he said.

The sales of DFPC reached around $230 million to $250 million last year.

As a body corporate, DFPC is tasked to operate the duty- and tax-free merchandising system in the Philippines aimed to augment the service facilities for tourists and to generate foreign exchange and revenue for the government.