MEANING OF CUSTOMS DUTIES AND TARIFF Customs Duties are taxes levied by a government on goods exported from or imported
into the country. They are used in the book to refer to import duties Tariff means a book of rates; a schedule of fees imposed on goods exported from or
imported into the country.
IMPORTED ARTICLES SUBJECT TO CUSTOMS DUTY General Rule: All imported articles, when imported from any foreign country into the Philippines, are subject to duty upon each importation. Even though the imported articles were previously exported from the Philippines. Exception: Otherwise provided in the Tariff and Customs Code.
CLASSIFICATION OF CUSTOMS DUTIES They may be classified as follows: 1.
Ordinary or Regular Customs Duties – are imposed and collected mainly as a source of
revenue, namely: a. Ad valorem – duty is based on the market value or price of the imported
article. b. Specific – duty is based on the weight or volume of the imported article c.
Alternate – the duty is based either on the weight or volume or on the value
of the imported article whichever is higher d. Compound – the duty is based both on the weight or volume and the value
of the imported article. 2. Special customs duties – imposed and collected in addition to the ordinary customs
duties usually to protect local industries against foreign competition. Alternate and Compound rates are no longer provided in the Tariff and Customs Code. The specific rates apply only to cinematographic films as their value is difficult to ascertain.
BASIS OF DUTIABLE VALUE Beginning July 1, 1996, the Bureau of Customs assessed imports on their Export Value (EV) as an initial step toward shifting from Home Consumption Value (HCV) to more universally accepted Transaction Value (TV) method by year 2000.
Home Consumption Value (HCV) method - is based on the common price prevailing in
the exporting country, which is normally higher than the export price of the product.
Export Value (EV) method - based on the invoice price of an item transacted
between the importer and exporter.
Transaction Value - is the price actually paid or payable for the goods when sold for
export to the Philippines, including other payments made by the buyer for the goods as purchased. The price is adjusted by adding the following to the extent that they are incurred by the buyer but are not included in the price actually paid or payable for the imported goods: 1. Commissions and brokerage fees (except buying commissions), costs of containers and packing; 2. Value of materials, etc. used in, and services undertaken for, their production; 3. Amount of royalties or license fees the buyer must pay as a condition of sale to the buyer. 4. Value of any proceeds from the subsequent resale, disposal, or use of the goods that accrues to the seller; and 5. Costs of transport and insurance, loading, unloading, and handling charges.
KINDS OF SPECIAL CUSTOMS DUTIES 1. Dumping Duty - duty imposed on a specific kind or class of foreign article, this is being imported into, or sold or is likely to be sold for expectation to or in the Philippines, at a price less than the fair value. 2. Countervailing Duty - duty imposed on articles, upon the production, manufacture or export of which any bounty or subsidy is granted in the country of origin and/or exportation. 3. Marking Duty - duty imposed on imported articles or their containers which have not been properly marked in any official language of the Philippines as to indicate the name of the country or origin of the article. The rate is 5% ad valorem. 4. Retaliatory or Discriminatory Duty - duty imposed upon articles of a foreign country which discriminates against Philippine commerce in such a manner as to place it at a advantage compared with the commerce of another foreign country.
OTHER CUSTOMS FEES, DUES OR CHARGES PAYABLE. 1. Harbor Fees - imposed on vessels entering into or departing from a port of entry in the
Philippines. 2. Wharfage Dues - assessed against the cargo of a vessel engaged in foreign or converse
trade based on the quantity, weight or measure receives and or discharged by such vessels. 3. Berthing Fees - assessed against a vessel for mooring or berthing at a pier, wharf, or
river at any port in the Philippines. 4. Storage fee - assessed on articles for storage in customs premises, cargo sheds and
warehouses of the government. 5. Arrastre charges - imposed on all imported and exported articles and baggages of
passengers, for their handling, receiving, and custody. 6. Tonnage dues - paid by the owner-agent, operator or master of a vessel engaged in
foreign trade based on the net tonnage of the vessel or weight of the articles discharged or laden. 7. Other fees and charges - charged and collected for services rendered and documents
issued by the Bureau of Customs.
The Flexible Tariff clause
Section 401 of the Tariff and Custom Code.
Provision of the National Internal Revenue Code which empowered the President, upon the recommendation of the Secretary of Finance to make adjustments on all internal revenue taxes subject to certain conditions and limitations was repealed by Executive Order No. 273 which adopted the value added tax. 1. Authority given- authorizes President. a. To increase, decrease or remove existing protection rates of import duty including any necessary change in classification: b. To establish import quota or ban imports on any commodity as may be necessary. c. To imposed an additional duty on all imports not exceeding its ad valorem whenever necessary. 2. Conditions for its exercise – the exercise of the power of the President is subject to the following conditions: a. The increase reduction or removal is necessary in the interest of national economy, general welfare and/ or national defense. b. There must be prior investigation by the Tariff Commission and National Economic Development Authority (NEDA). c. The President may reduce the existing rates of the import duty by not lower than the basic rate of 10% ad valorem or increase them by not higher than a maximum of 100% ad valorem. d. Any order issued by the President under said section shall take effect only 30 days after promulgation, except in the imposition of additional duty not exceeding 10% ad valorem which shall take effect at the discretion of the President.
