In my previous article, I outlined some of the reasons why Philippine giant retailers have no online shops where people can just pay for orders and have the goods delivered. This time around, I would like to touch on the reasons why Filipinos in general stay away from buying online.
Filipinos are known to be internet savvy and even outpace other countries when it comes to using the internet whether for research, gaming, and social media. But when it comes to purchasing online we are one of the smallest markets for online shops based abroad. One of the reasons for this is horrendous customs duties.
Purchasing online is very easy as there are many ways to pay for an online purchase. The transaction can be made by means of credit cards, PayPal, Debit Card and other means acceptable to the merchant. Many online merchants such as Amazon offer cheap and competitive prices for goods that would normally cost more when purchased here in the Philippines so the temptation to order online is always there.
However, many of our Kababayans who bought online from a merchant based abroad learned the hard way that Philippine Customs duties is a pain not only in the neck for the trouble of having to go to the customs office to claim the package but most especially to the pocket in terms of taxes to be paid.
Since any purchase abroad is considered importation, the goods you purchased will be subject to import duties. The Philippines has one of the worst protectionist policies for local businesses so expect to be charged an arm and a leg for that personal item bought online.
While there are online customs duty calculators that you can use, they are not accurate because they are meant only to give you an idea on how much to pay. In the Philippines, the Customs officers have the right to say and declare how much you should pay. Their assessment although supposedly based on the rates and the applicable taxes such as import duty,storage and other taxes, still they have the leeway to play with the amount that you have to pay.
There are times you can be assessed and be made to pay 200% of your goods value and there are also times that you may be assessed much lower. There seems to be a gray area where the customs officers can determine for themselves how much you should pay and this to many Filipino online buyers is frustrating.
Visit the site of the Philippine Tariff Commission or read the tariff and Customs Code and you will see that they even add to the confusion rather than enlightenment.
To be sure, the Philippine government has to come up with a definite guide on how to tax internet purchases. But this idea still has a long way to go as there are no signs that the government is focusing on this issue.
What is the remedy if you want to buy online and avoid payment of customs duties?
The only remedy if you want to buy online a personal item without paying customs duties is to have the goods delivered to a friend or relative in the country where the merchant is based. If you have a relative in the US and you want to buy from Amazon, have the goods delivered to your relatives in the US and ask them to hand-carry the goods when they come here to the Philippines.
Your purchased item can also be sent through a Balikbayan box if your Filipino friend or relative is still not scheduled to come back to the country anytime soon. This is the technique often used by Filipino online buyers and it is a pity because it should not be the case in the first place if only the government will be liberal in its treatment of internet purchases.
Possibly one way of solving the problem is to differentiate personal items from those meant to be re-sold or use for business purposes. This can help ease Philippine Customs duties for online purchases of Filipinos just wanting to buy cheaper products or items not yet available in the country.
There could be other options being used by other Filipino online buyers and I know some of them but have not used any of them yet. If you know of a better option, please feel free to share in the comments section.