Clarificatory Guidelines for the Duty-free Importation of Books

The DOF are now in the hot seat and widely ridiculed by the blogging world for the issuance of its new policy on the importation of books. Last March 24, 2009, the DOF issued the Department Order 17-09 titled, "Clarificatory Guidelines for the Duty-free Importation of Books".

That is quickly followed by importation of books FAQ.

What does it says?

1. Only books that are educational, scientific and cultural materials listed in Annex A to E in the Florence Agreement and not for sale, barter or hire has 0% duty. The one who will determine and certify that the books falls under the Florence Agreement is UNESCO.

> When you purchase books or other materials online (must not be in commercial quantity), you must now need a certificate from UNESCO addressed to the DOF that the book you are importing is educational, scientific or cultural.

>ONLY IN THE PHILIPPINES!!! UNESCO is functioning as a regulating agency for the Philippine government. BTW, UNESCO is an NGO! Pero ok na din kaysa nmn ang BOC mag determine!

2. The economic, technical, vocational, scientific, philosophical and historical books that is not for sale, barter or hire which is duty and vat free as mentioned in Section 105(s) of the TCCP will need certification from DepEd or CHED.

> Yes! May bagong pagkakakitaan na naman ang DepED at CHED.

3. The duty and vat free imported books which can be sold, bartered or hired under RA 8047 are only those books solely used for book publishing. When our congress people wrote the law, the intention was to promote the book publishing industry daw.

>WTF?!! First of all why will somebody import books for book publishing? Parang sinabi nila na yung user's manual lang sa paggamit ng printing press at book binding ang duty at vat free.

4. Books are still vat free but you need clearance from DOF -.-". According to the DO:

The guidelines herein provided do not cover the treatment of imported books for Value-Added Tax (VAT) purposes as section 109(r) of the 1997 Tax Code, as amended, provides that the importaion of books is VAT-exempt, though applicant /importer still needs to secure DOF confirmatory-exemption clearance for this purpose.

5. If you import books that is for sale, barter or hire, then it is subject for duty. 1% for educational, scientific, cultural, economic, technical, vocational, philosophical, and historical books. 5% for other books.
> This one is really confusing. How will you say a book is not educational? Base on their definition:

Educational books - consisting essentially of textual matter of any kind, and printed in any language or characters. This includes textbooks including educational workbooks sometimes called writing books, with or without narrative textx, which contain question or exercises. Such books, with or without narrative texts, which contain questions or exercises. Such books may be bound (in paper or with soft or stiff covers) in one or more volumes, or may be in the form of printed sheets comprising the whole or a part of the complete work and designed for binding. Educational books are instructive and informative books; it relates to teaching and learning. Examples: Textbooks, workbooks, writing books for grade school, high school and college students and used as a basis for study in the academe.

From my point of view that according to their definition, all books are educational, even fictional books like Twilight. Heck, even tantric texts like Kama Sutra is educational.

If fictional books are not educational then why are we required in school to pass book reports.

Why do we even have a subject in college called world literature?

Honestly, what kind of brains does DOF people have? Why are we encouraged and sometimes required to read works like Tom Sawyer, Odyssey, Count of Monte Cristo, The Alchemist and many more. Maybe 'Twilight' is a special case because they think that books that contains mythological characters is not educational.

Also, it is not stated in the Florence Agreement that it should be books for personal use only that is duty and vat free

Book publishing industry? How about the retail stores? Aren't they a domestic industry also?

Tips for my fellow countrymen: say goodbye to Fully Booked and National Bookstore and say hello to amazon.com and barnesandnobleinc.com.

Customs Duties and VAT Calculator

Thank God, I finished it!! I made a customs duties and vat calculator using Visual Basic 6.0. It was not as easy as I imagined since I forgot some of the codes and syntaxes. The last time I used VB6 is in 4th year high school and with todays crazy life that is like gazillion years ago.

It is just an ordinary calculator. It can compute up to 4 items (shipped together). You need to input the cost, shipping cost (total shipping cost of all items), rate of exchange, rate of duty for each item and the total excise tax if there is any. The calculator is only applicable on importations through mail (ems, naia, post office).

Click the link below to download the file (.exe file):
Customs Duties and VAT Calculator

If there are any bugs, suggestions or you want more features to be added (please nothing too ambitious for my powers), please write it on the comments section.

Hope it helps :)

Importation 101

What articles are subject to duty?

According to Section 100 of the Tariff and Customs Code of the Philippines as amended:

"All articles, when imported to the Philippines, are subject to duty upon each importation, even though previously exported there except as otherwise specifically provided for in the Tariff and Customs Code, as amended, or in other laws."



What are the different kinds of imported goods?

Kinds of Imported goods

1. freely importable goods - importable goods that are neither regulated or prohibited. These goods can be imported without clearance or permit from corresponding government agencies.
2. regulated importations - imported goods that requires clearances or permit from corresponding government agencies upon each importation.
   
3. prohibited importations - imported goods that cannot be brought in the country under existing laws and regulations except otherwise permitted under strict conditions and regulations from corresponding government agency (conditionally prohibited).

Are there articles subject to duty and vat exemptions?

Yes, there are. Articles under Section 105 of TCCP as amended are duty-free importation but certain conditions (e.g. posting of re-exportation bond, permits, clearances) must be met to avail of this privilege; while vat-exempted articles are listed under Section 109 of the National Internal Revenue code of the Philippines (NIRC).



Aside from customs duties and vat, what other duties, taxes and other charges that can be levied on imported goods or during importation of goods?

Excise Tax- tax imposed on luxury goods and non-essential goods like spirits, wines, cigarettes, some petroleum products, yachts, motored vehicles etc.

Anti-dumping duty - additional duty levied aside from normal customs duties to counter the effects of "dumping". Dumping is a form of price discrimination between two national markets. It occurs when foreign producers sell their products to an importer in the domestic market at prices lower than in their own national markets , or at prices below cost of production which causes injury or threatens to injure the domestic industry producing like or comaprable products or retards the establishment of a potential industry.

Countervailing duty - a special duty levied, in addition to the regular duty and other charges, by an importing country on its imports which have been found to be subsidized in the country of origin or exportation.

Customs Documentary Stamps - fee collected for the affixing of customs documentary stamps (250 pesos).

BIR stamp - fee collected for the affixing of BIR stamp (15 pesos)

Import Processing Fee - fee collected for the prcoessing of imported goods. It depends on the total dutiable value (CIF value) of imported goods.

Warehouse storage fee - fee collected on imported goods that are not expeditiously removed and cleared from the customs bonded warehouse.

Fines and surcharges - penalties imposed on goods violating tariff and customs laws and regulations.

Other fees - fees that are normally assessed against items that require review or examination, certifications, quarantine or similar services that are required upon import by the corresponding government agency.