Troubles of online shopping in the Philippines
Last December, I was trying to stay away from driving to the mall because I knew the traffic would be terrible. With much free time at home coupled with my unused shopping energy, I ended up shopping online. I am not new to online shopping as I have lived overseas where it's convenient.
Back to my story - I tried having personal items delivered here (in Makati) from strawberrynet.com. Ordered mid of December, tracking stated it arrived here in the Philippines January 2 but I received a notification from the Makati Post Office January 20. The notification was stating that I should personally claim my parcel (no doorstep delivery for parcels via the post office). Upon claiming, I was surprised with how much I needed to pay as "custom taxes." I had expected duty taxes around 12% as that's our VAT rate here in the Philippines but I was charged P1,223 for a P3,257 worth of items. That is 37.5% TAX!!
Here is how it was computed:
Item cost (2 small perfume + lip scrub) = P3,257
TAXES:
My impression of the people I dealt with in the post office was that they were so ready of their reply. As if I was picking on a fight. I couldn't blame them because sometimes people tend to stereotype government workers to be incompetent, or waiting for "lagay." So maybe from their experience, they wanted to show me that everything they were charging me was written in their handbook. They even provided me the handbook (though they didn't bother to open it to the specific tax sections) and asked me to check on it.
My first question (in a very polite manner) was what's the price limit of non-taxable items. Their reply was it depends, normally 50 USD is considered INFORMAL entry and will be taxed like mine, 50 USD and above are considered FORMAL and are taxed more due to custom levy, etc. 49 USD and below - no tax.
I asked this because from experience, other countries would allow around 400 USD meaning if you buy items below 400, they will not tax you. If it is above the limit, they will tax you with GST or VAT which is around 7-12% only. Computation is that simple.
I still have a lot of questions - why were the taxes added (custom duty, BIR stamp, etc) to the item cost before computing for the 12% VAT? What is IPF? Why was the limit too little but if you travel overseas and bring the items with you, you are only taxed for items above P30,000? But I opted to pay the tax they computed without being difficult.
Verdict: I will try to read through http://customs.gov.ph before purchasing goods overseas again. With the trouble it gave me, I don't think I will be shopping online on foreign sites anytime soon.
Back to my story - I tried having personal items delivered here (in Makati) from strawberrynet.com. Ordered mid of December, tracking stated it arrived here in the Philippines January 2 but I received a notification from the Makati Post Office January 20. The notification was stating that I should personally claim my parcel (no doorstep delivery for parcels via the post office). Upon claiming, I was surprised with how much I needed to pay as "custom taxes." I had expected duty taxes around 12% as that's our VAT rate here in the Philippines but I was charged P1,223 for a P3,257 worth of items. That is 37.5% TAX!!
Here is how it was computed:
Item cost (2 small perfume + lip scrub) = P3,257
TAXES:
Custom
Duty - 7%
|
228
|
|
BIR
Stamp
|
15
|
|
Miscellaneous
- IPF
|
250
|
|
Custom
Doc Stamp
|
280
|
|
773
|
||
PLUS
|
||
VAT =
(Item Cost + TAXES) * 12%
|
||
= (P3257 +
773) *12%
|
480
|
|
TOTAL
TAX
|
P1253
|
|
My impression of the people I dealt with in the post office was that they were so ready of their reply. As if I was picking on a fight. I couldn't blame them because sometimes people tend to stereotype government workers to be incompetent, or waiting for "lagay." So maybe from their experience, they wanted to show me that everything they were charging me was written in their handbook. They even provided me the handbook (though they didn't bother to open it to the specific tax sections) and asked me to check on it.
My first question (in a very polite manner) was what's the price limit of non-taxable items. Their reply was it depends, normally 50 USD is considered INFORMAL entry and will be taxed like mine, 50 USD and above are considered FORMAL and are taxed more due to custom levy, etc. 49 USD and below - no tax.
I asked this because from experience, other countries would allow around 400 USD meaning if you buy items below 400, they will not tax you. If it is above the limit, they will tax you with GST or VAT which is around 7-12% only. Computation is that simple.
I still have a lot of questions - why were the taxes added (custom duty, BIR stamp, etc) to the item cost before computing for the 12% VAT? What is IPF? Why was the limit too little but if you travel overseas and bring the items with you, you are only taxed for items above P30,000? But I opted to pay the tax they computed without being difficult.
Verdict: I will try to read through http://customs.gov.ph before purchasing goods overseas again. With the trouble it gave me, I don't think I will be shopping online on foreign sites anytime soon.
Oh, so this is why when I asked tips when buying from strawberry.com, someone told me to limit my purchases to 2k php converted rate.
ReplyDeleteOh well.