Bill filed to raise tax-exemption on duty-free purchases

CEBU - House Minority Leader Marcelino Libanan wants to raise to $6,000 the aggregate tax-exempt purchases that returning overseas Filipino workers (OFWs) and Balikbayans may make at duty-free shops operated by the Department of Tourism (DOT).

Libanan has filed House Bill No. 6472, which seeks to upgrade the benefits and privileges enjoyed by returning Filipinos under a 33-year-old law that established the Balikbayan Program.

“Once enacted, we expect our measure to encourage a greater number of balikbayans to make their purchases here at home in DOT duty-free shops shortly after arrival, rather than in foreign stores and help the Philippine economy generate more dollars,” Libanan said.

Balikbayans are currently entitled to make only up to $3,500 in tax-exempt purchases at DOT duty-free shops. The $3,500 ceiling is split into up to $1,500 worth of discretionary consumer goods, plus up to $2,000 worth of “livelihood tools” under the exclusive “kabuhayan” shopping privilege.

Libanan’s bill would increase to $3,000 the limit for discretionary items, and also raise to $3,000 the separate threshold for livelihood tools ranging from computers and sewing machines to carpentry gadgets and farm implements.

“The upward adjustments in the allowable tax-exempt purchases are needed to account for decades of cumulative price inflation and to ensure that the shopping privileges remain substantial for the benefit of balikbayans,” he said.

Congress enacted the Balikbayan Program Law in 1989 to encourage Filipinos overseas to come and visit their homeland. Balikbayans may make their tax-exempt purchases at DOT duty-free shops within 15 days from arrival, or during the Christmas season (from Nov. 15 to Jan. 15 of every year), within 30 days from arrival.

The DOT runs three duty-free shops at the Ninoy Aquino International Airport Terminals 1, 2 and 3 and five other duty-free shops at Fiestamall in Paranaque City, the Mall of Asia Complex in Pasay City, Mactan-Cebu International Airport, Kalibo International Airport and Iloilo International Airport.