De Minimis Rule Review — What Online Shoppers Should Know About the ₱10,000 Import Tax Exemption
DE MINIMIS RULE PHILIPPINES – Filipinos who buy cheap items from overseas sellers on Shopee, Lazada and other online platforms may one day have to pay taxes on those parcels, as the Department of Finance (DOF) is studying the possible removal of the tax exemption on imported goods worth ₱10,000 or less.
Finance Undersecretary Karlo Fermin Adriano told reporters that the exemption, known as the “de minimis” rule, puts local manufacturers at a disadvantage because goods bought locally are generally subject to value-added tax (VAT) no matter how low their price is, the Philippine Daily Inquirer reported.
What Is the De Minimis Rule?
Under the de minimis rule, imported goods valued at ₱10,000 or less enter the country without customs duties and taxes. Here are the key points:
- The ₱10,000 threshold excludes insurance and shipping costs, and is computed after deducting genuine discounts.
- Tobacco and alcohol products remain subject to excise tax even if their value falls below the threshold.
- The threshold has been in place since 2016 under the Customs Modernization and Tariff Act (CMTA), according to BusinessWorld.
The exemption has become more relevant as e-commerce platforms make it easier for Filipino consumers to order low-priced goods directly from sellers abroad.
Why the DOF Wants to Review It
Adriano described the exemption as a revenue leakage, especially in the e-commerce space. He said foreign producers “have a competitive edge” because their low-value shipments come in with “no tariff, no VAT, nothing.”
He also noted that the global trend is moving toward removing such exemptions altogether, even though some countries already use lower thresholds, BusinessMirror reported.
Another problem, according to the finance official, is that some goods worth more than ₱10,000 are also being declared as de minimis shipments. This makes it hard for the government to compute the right taxes and estimate how much revenue is actually being lost.
Because of this, the DOF has asked the International Monetary Fund (IMF) for help in estimating the potential revenue from removing the exemption, even if only VAT were imposed.
Will Online Shoppers Pay More Soon?
Not right away. The DOF stressed that the review is still in the study stage, and removing the exemption would require Congress to amend the CMTA.
- No change yet – Imports worth ₱10,000 or less remain exempt from duties and taxes for now.
- Legislation needed – “You would need legislation for that,” Adriano said.
- Timing uncertain – The official admitted that pushing the measure “may not be timely” under current conditions and that it could be unpopular with consumers. He said the DOF could push for it “if there’s an opportunity — maybe us or the next admin.”
The Philippine Retailers Association has earlier pushed for the removal of the de minimis rule, with its chairman Roberto Claudio Sr. saying in September that the group had already raised its concerns with government agencies.
The review is part of the DOF’s broader study of tax measures as the government targets ₱4.441 trillion in tax revenues this year, 8.9 percent higher than in 2025. At the same time, the agency said it supports proposals to abolish the travel tax.
Do you often buy items from overseas sellers online? Would scrapping the ₱10,000 de minimis exemption change the way you shop? Let us know in the comments.
