History of Philippine Tariff

• History of Philippine tariff system


  • Ancient Filipinos were already trading with China, Japan, Siam (Thailand), Cambodia, India, Burma, Sumtra, Java and other neighbouring islands
  • Subsequent alternations and amendments were introduced into this new tariff in 1855, 1857 and 1870 but the policy of protection for Spanish merchandise continued unmodified
  • Philippine products were accorded preferential treatment in Spain. The law of 1882 provided that except tobacco, rum, sugar, cacao, chocolate and coffee, the products of Archipelago were to be exempted from duty
  • The ancient almojarifazgo(a three percent ad valorem duty) imposed on both imports and exports was established in Manila by Governor Guido R. Lavizaresin 1573
  • Duty on Chinese goods was increased to six percent in 1606
  • Zamboanga was opened in 1833
  • Cebu in 1842
  • Iloilo and Sulu in 1855
  • Legaspi and Tacloban in 1874
  • A price was fixed for the commodities, "which was paid in gold, as a greed upon or in metal bells (gongs) brought from China"
  • The Chinese writers Chao Ju-Kua(1209-1214) and Wang Tay-Uan(1349) observed that the ancient Filipinos were hones in the commercial dealings
  • Other foreign traders who brought silks, woolens, bells, porcelains, perfumes, iron tin, coloredcotton cloth and other smell wares to the country paid tariff duties
  • Philippine exports consisted mainly of rice, coconuts, palm oil, sugar, fibers, straws, cane, dyewoods, lumber and luxuries such as sea snails, beches, defmerk, edible bird nests, tortoise shell, pearls and mother of pearls shells
• Tariff rates enforced


  • Fifteen (15%) percenton all goods from Spain and Mexico
  • Three (3%) percenton all goods from other countries, except those from China which was 6%
  • Ten (10%) percentof all Asiatic Merchandise to Mexico (export)
  • Three (3%) percenton all exports other than Asiatic
• Purposes of tariff


  • To increase revenue
  • To protect the agriculture and arts of the islands
  • To expand foreign commerce
• Key events in Philippine tariff history


  • On April 1, 1891, the new tariff which was promulgated on March 3, 1891 took effect
  • In the later part of 1801 and in 1892, these export duties were restored in 1893 and were continued in force under the American administrative until 1918
  • These laws of 1891 remain enforced up to the beginning of the American occupation and was continued in force and affected by the US Military Government until November 15, 1901
• Philippine Tariff Act of 1909


  • An act to raise revenue for the Philippine Islands
  • This was the first piece of tariff legislation passed by the United States Congress for the Philippines during the American regime
  • It gave birth to the imposition of tariffs against imported articles from foreign countries entering the territory of the then Philippine Island
  • The passage of this law gave birth to a preferential trade relation between the two states
• Act 2711


  The Revised Administrative code
• Republic Act 1937


  • This was passed and enacted by the first Philippine legislature during the year 1957
  • This was the first Tariff and Customs Code passed in the history of the Philippine Congress which was enacted by an all Filipino legislature
  • Signed into law by a Filipino President and superseded by 48 years colonial regime of the Tariff Act 1909
• REPUBLIC ACT NO. 6635


  AN ACT TO REVISE THE TARIFF AND CUSTOMS CODE OF THE PHILIPPINES
• PRESIDENTIAL DECREE No. 34


  AMENDING THE TARIFF AND CUSTOMS CODE OF THE PHILIPPINES
• WHEREAS, there is a pressing need to revise the Tariff and Customs Code of the Philippines under Republic Act No. 1937, as amended, so as to:
• Reasons for revising the Tariff and Customs Code


  • Simplify the present complicated tariff structure and improve thereby the administration of customs
  • Raise additional revenues
  • Provide tariff protection to economically desirable and deserving local industries
  • Serve as an instrument for bargaining vis-a-visother countries
  • Allocate properly available resources from investment in non-essentials to investments in essential and exportable goods
  • Prevent technical smuggling
• PRESIDENTIAL DECREE No. 1464


  A DECREE TO CONSOLIDATE AND CODIFY ALL THE TARIFF AND CUSTOMS LAWS OF THE PHILIPPINES
• Again in June 11, 1978, during the reign of Martial law, Marcos once again revised P.D. 34 and codified into one single code all tariff and customs laws and amendments which is now the present Tariff and Customs Code of the Philippines
• Purposes of P.D. 1464


  • To infuse flexibility
  • To keep pace with the changing needs and demands of trade and commerce
  • To strengthen the punitive force of the Tariff and Customs Code against smuggling and other forms of customs fraud at that time
• It took effect April 1, 1979
• EXECUTIVE ORDER NO. 688


  ALIGNING THE PHILIPPINE TARIFF NOMENCLATUREAND THE GENERAL RULES OF CLASSIFICATION PROVIDED FOR UNDER SECTIONS 104 AND 203 OF PRESIDENTIAL DECREE NO. 1464 IN ACCORDANCE WITH THE CUSTOMS COOPERATION COUNCIL NOMENCLATURE
• When the Philippines joined the Customs Cooperation Council there was a need again for the revision of our tariff system which prompted former Pres. Marcos to issue EO 688 in May 9, 1981 pursuant to his Flexible Tariff powers under Sec. 401 of P.D. 1464
• Which ordered the alignment of the Philippine Tariff Nomenclature and the General Rules of Classification with that of the Customs Cooperation Council Nomenclature
• The CCCN have been the tariff structure of the Philippines ever since but presently influenced by the GATT
• EXECUTIVE ORDER NO. 127


  BY THE PRESIDENT OF THE PHILIPPINES MODIFYING THE RATES OF DUTY ON CERTAIN IMPORTED ARTICLES UNDER SECTION 104 OF THE TARIFF AND CUSTOMS CODE OF 1978, AS AMENDED, IN ORDER TO IMPLEMENT SECTION 109 OF REPUBLIC ACT 8435, OTHERWISE KNOWN AS THE "AGRICULTURE AND FISHERIES MODERNIZATION ACT OF 1997"
• After Marcos ousted in February 1986, Former Pres. Cory Aquino, ordered the re-organization of the then Ministry of Finance (now Department of Finance) and its attached agencies to be more capable and responsive organizationally and functionally in its primary mandate of judiciously generating and efficiently managing the financial resources of the Government
• With the enactment of this order, The Bureau of Customs was strengthen by the addition of 2 assistant Commissioners that divided the Bureau of Customs into 4 groups which are headed by the 4 Deputy Commissioners of Customs
• EXECUTIVE ORDER NO. 156


  FURTHER AMENDING SECTION 201 OF THE TARIFF AND CUSTOMS CODE OF THE PHILIPPINES, AS AMENDED, CHANGING THE BASE FOR CUSTOMS VALUATION FROM HOME CONSUMPTION VALUE TO COST, PLUS INSURANCE AND FREIGHT (C.I.F) AND FOR OTHER PURPOSES
• Again Former Pres. Aquino then exercising the power and at the same time the legislative power under her revolutionary government, Issued E.O. 156 as an amendment to Sec. 201 of P.D. 1464 changing the basis of dutiable value from Home Consumption Value (HCV) to Fair Market Value (FMV) which was more uniform to the pressing situation then
• REPUBLIC ACT NO. 7650

  AN ACT REPEALING SECTION 1404 AND AMENDING SECTIONS 1401 AND 1403 OF THE TARIFF AND CUSTOMS CODE OF THE PHILIPPINES, AS AMENDED, RELATIVE TO THE PHYSICAL EXAMINATION OF IMPORTED ARTICLES
• This was enacted by Congress of the Philippines after 36 years since the First Congress of the Philippines passed R.A. 1937
• The act repealed Section 1404 of PD 1464. abolished the office of the Customs Appraiser but incorporated the separate functions of a Customs Appraiser and the Customs Examiner into one Customs Officer tasked to inspect and appraise imported articles now present in Sec 1403
• This law also amended Section 1401 of PD 1464 on the Conditions for Examination of Imported articles
• This was approved into law on April 6, 1993 during the time of former President Ramos
• REPUBLIC ACT NO. 7651


  AN ACT TO REVITALIZE AND STRENGTHEN THE BUREAU OF CUSTOMS, AMENDING FOR THE PURPOSE CERTAIN SECTIONS OF THE TARIFF AND CUSTOMS CODE OF THE PHILIPPINES, AS AMENDED
• Passed 2 months after the enactment of R.A. 7650, this law introduced amendments to P.D. 1464, which revitalized and strengthens the Bureau of Customs in its fight against technical smuggling and other customs fraud
• Key provisions of RA 7651

  • It defined very clearly those imported articles deemed abandoned in favorof the government and its manner of disposition
  • Rules on Undervaluation
  • Misclassification
  • Misdeclaration
  • Issuance of warrant for seizure and its appeal process
  • The provision on the issuance and suspension/revocation of license for customs broker
• This was signed into law by then President Ramos on June 4, 1993
• Republic Act No. 8181

  TRANSACTION VALUE ACT
• This law enacted by the 10th Congress of the Philippines on March 27, 1996 in compliance with the Philippine accession to the World Trade Organization
• It introduced a change in the basis of dutiable value of imported articles subject to an ad valorem rate of duty from Fair Market Value (FMV) to Transaction Value (TV) consistent with the principles and general provisions of the General Agreement of Tariffs and Trade (GATT) of 1994 and Uruguay Round Final Act which the Philippines is a signatory
• Under its transitory provisions, the application of Transaction Value was deferred until Congress authorizes its shift before January 1, 2000
• The dutiable value of an imported article subject to an ad valorem rate of duty shall ne based on the export value as interim value before the full implementation of the transaction value
• REPUBLIC ACT NO. 9135


  AN ACT AMENDING CERTAIN PROVISIONS OF PRESIDENTIAL DECREE NO. 1464, OTHERWISE KNOWN AS THE TARIFF AND CUSTOMS CODE OF THE PHILIPPINES, AS AMENDED, AND FOR OTHER PURPOSES
• This new tariff measure was passed by the 11thCongress and signed into law by former President Macapagal– Aroyoon April 27, 2001 and took effect June 2, 2001 after its publication in 2 newspapers of general circulation