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The Department of Finance is studying whether to end the duty and tax exemption on imports worth P10,000 or less
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Finance officials cite unfair competition for local sellers and revenue leakage in e-commerce
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No change applies yet, and ending the exemption would require Congress to amend the Customs Modernization and Tariff Act
The Department of Finance (DOF) is studying whether to end the exemption from duties and taxes on imported goods valued at P10,000 or less, Finance Undersecretary Karlo Fermin Adriano told reporters. The review could affect Filipinos who buy low-cost items from overseas sellers on online platforms such as Shopee and Lazada.
Adriano said the exemption puts local manufacturers at a disadvantage, since goods bought locally generally carry value-added tax (VAT) whatever their price. He called it revenue leakage in e-commerce, saying foreign sellers gain an edge because low-value shipments arrive with no tariff or VAT. He added that there is a global trend toward removing such exemptions, and that some countries already use lower thresholds.
Some goods worth more than P10,000 are reportedly being declared as low-value shipments, the report said. That makes it hard to compute the right taxes or estimate lost revenue. The DOF has asked the International Monetary Fund to help estimate revenue from removing the exemption, including a scenario where only VAT is charged.
Roberto Claudio, Sr., chairman of the Philippine Retailers Association, said in September that the group had already raised its concerns with government agencies and pushed for removing the rule.
Still at the study stage
The review is early. Imports of P10,000 or less remain exempt for now. Adriano said ending the exemption would need Congress to amend the CMTA. He acknowledged the timing “may not be timely” and that the measure could be unpopular with consumers. He suggested it could advance under this administration or the next.
The review is part of the DOF’s wider look at tax measures, as the government targets P4.441 trillion in tax revenue this year, 8.9% higher than in 2025.
How the exemption works
The P10,000 threshold excludes insurance and shipping costs and is computed after genuine discounts. Tobacco and alcohol stay subject to excise tax regardless of value.
The P10,000 threshold dates to 2016. PortCalls reported that Customs Administrative Order No. 02-2016 raised the de minimis value from P10 to P10,000, implementing Section 423 of the CMTA. Under that order, low-value shipments go through a simplified, ICT-enabled system with advance clearance and usually face random, non-intrusive examination. The order is reviewed every three years, and the Finance Secretary adjusts the threshold using the consumer price index.
