Profile of

Philippine
Tariff System
History of Tariff
Originated from old Spanish coast town Tarifa, 21 miles of
Gibraltar. It is a high promontory and connected to the coast
only by a narrow cause way

Commerce began to expand from the Mediterranean, a gang of

racketeers made Tarifa their headquarters and held up all
merchant ships at this point and levied them a fixed rate

The mariners called this tribute a tariff and the word

became current in England whose vessels formed the
majority in the merchant trade

The government of Europe began to make similar

levies on imports and tariff became a prolific
source of revenue.
 History of Philippine Tariff System
 The ancient Filipinos were already trading with
China, Japan, Siam (Thailand), Cambodia, India,
Burma, Sumatra, 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. Lavizares in 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 agreed 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, colored cotton
cloth and other small 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 Board, the rates were enforced as
follows:

 Fifteen (15%) percent on all goods from

Spain and Mexico
 Three (3%) percent on all goods from other
countries, except those from China which
was 6%
 Ten (10%) percent of all Asiatic
Merchandise to Mexico (export)
 Three (3%) percent on all exports other
than Asiatic.
Purposes
 To increase revenue

 Toprotect the agriculture

and arts of the islands

 To expand foreign commerce

 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)
 Particularly Chapter 39, Sections 1137
to 1419 of Book II (Bureau of
Customs/Customs Law) and

Chapter 66, Sections 2702 to 2713

(offenses connected with
Administration of Bureau of Customs)
which was

approved by the Governor General in

March 10, 1917.
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.

Lapsed into Law on October 23, 1972

PRESIDENTIAL DECREE No. 34
October 27, 1972

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:

 Simplifythe 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-vis other

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
 This decree was issued 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
May 9, 1981

ALIGNING THE PHILIPPINE TARIFF NOMENCLATURE AND

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)
 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
March 30, 1987

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
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
 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
 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
 It defined very clearly those imported articles
deemed abandoned in favor of 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 be 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 11th Congress and
signed into law by former President Macapagal – Aroyo on April 27,
2001 and took effect June 2, 2001 after its publication in 2
newspapers of general circulation
 The legislature now authorizes the shift from the interim valuation
of Export Value to the use of the Transaction Value as mandated
by the WTO valuation agreement where the Philippines was
committed to implement way back January 1, 2000.
 The legislature clarified and carefully structured the Transaction
Value, which is the price actually paid or payable for the goods
when sold for export to the Philippines
 The law applies additional “safety measure” against
undervaluation and other customs fraud by the introduction of
“force acquisition” by the Bureau of Customs against gross
undervalued goods
 It introduces the dual mandatory requirement of “Record Keeping”
and the “Post Entry Audit System” which have for its object the
determination of whether or not the importer declared the correct
Transaction Value of his imported articles
Republic Act No. 9280

AN ACT REGULATING THE

PRACTICE OF CUSTOMS BROKERS
PROFESSION IN THE
PHILIPPINES, CREATING FOR
THE PURPOSE A PROFESSIONAL
REGULATORY BOARD FOR
CUSTOMS BROKERS, AND
APPROPRIATING FUNDS
THEREFOR
 Itprofessionalizes the practice
of customs broker profession
and making it exclusive to
professional customs brokers by
prohibiting corporations from
engaging in the practice of
Customs Broker profession.
 What is Tariff?
The word is derived from old
French tarife, “rate”,
which is from Spanish tarifa, “price list”
From Arabic ta’ rif “ notification” a verbal noun
from ‘arafa, “ to know
Italian tariffa, “price list”
Portugese tarifa, “schedule”
Tariff is a table or schedule of tax rates imposed
on imports or exports.
It is a form of tax levied on goods imported into
a country
 Origin of Customs
 Philippine Customs Service started many centuries back long
before the Philippines was discovered by the eastern and western
expeditionaries.

 The Philippines had already a flourishing trade with countries of

Southeast Asia, but since money at that time was not yet the
medium of exchange, people then resorted to the barter system of
commodities.

 The rulers of the barangays were known as the “datus” or “rajahs”

collected tributes from the people before they were allowed to
engage in their trade.

 The practice of collecting tributes became part of their culture

and was then observed and followed as the Customs Law of the
Land.
After Spain had taken full control of almost all the trades
of the country, it passed three important statutes:

 Spanish Customs Law which was similar to that of the

Indies enforced in the country from 1582 to 1828. It
was a concept of ad valorem levied on import and
export.
 A Tariff Board was established which drew up a tariff
of fixed values for all imported articles on which ten
percent (10%) ad valorem duty was uniformly
collected.
 Another Tariff Law was introduced in 1891, which
established the specific duties on all imports and on
certain exports and this lasted till the end of the
Spanish rule in the Philippines.
 When the Americans came to
the Philippines, the Military
Government continued to
enforce the Spanish Tariff
Code of 1891, which
remained in effect until the
Philippine Commission
enacted the Tariff Revision
Law of 1901.
 What is Customs?
Customs is an authority or agency in a
country responsible for collecting and
safeguarding customs duties and for
controlling the flow of goods including
 Animals
 Transports
 Personal effects
 hazardous items in and out of a country
Tariff distinguished from Customs

TARIFF denotes the list of schedules of

commodities with the corresponding duties
or charges imposed.

CUSTOMS denotes taxes paid for

importation and exportation of
commodities across national boundaries
Tariff and Customs
Tariff a term found in many languages, denotes
the lists or schedule of commodities with the
particular duties and charges upon each noted

Whereas

Customs is the English term which originally

denoted all Customary tolls or dues paid by
merchants upon commodities on their way to
or from market, not necessarily differentiated
by the class of goods for the benefit of the
king, lord, local government or other authority
 Modern Tariff
A systematic arrangement of the
Customs duties levied on goods when
they pass the border of a political unit.

An official list or schedule setting forth

the several customs duties to be
imposed on imports, exports or goods in
transit.