Blog > Marketplace News > Philippine Retailers Association proposes to adjust small-amount tax exemption policy
Philippine Retailers Association proposes to adjust small-amount tax exemption policy
Lukaku 13 May 2025 12:23ENCopy link & title
According to foreign media reports, the Philippine Retailers Association (PRA) recently sent a letter to customs officials, stating that the current implementation of "small duty exemption" (exemption of taxes and tariffs on imported goods worth P10,000.00 or less) has caused tax unfairness and government revenue loss.
The letter stated that the implementation of "small duty exemption" was originally intended to simplify trade processes and promote business, especially benefiting micro, small and medium-sized enterprises, while reducing the administrative burden associated with all small trade goods.
But it turned out to be counterproductive. PRA said that with the growth of the Philippine digital economy, the rise of e-commerce has created a tax imbalance that puts local retailers at a disadvantage. "It is clear that the small duty exemption policy has caused the competitive environment to tilt towards digital merchants, both foreign and local.
As a result, these merchants often evade tax obligations or pay lower tariffs compared to local retailers, which allows them to offer products at lower prices," PRA said in the letter.
The organization also added that while the rules have proven effective in the past, existing rules and policies must be revisited, especially import orders from China, which, while individually small, collectively resemble large-scale smuggling, gradually harming local businesses.
The letter stated that the implementation of "small duty exemption" was originally intended to simplify trade processes and promote business, especially benefiting micro, small and medium-sized enterprises, while reducing the administrative burden associated with all small trade goods.
But it turned out to be counterproductive. PRA said that with the growth of the Philippine digital economy, the rise of e-commerce has created a tax imbalance that puts local retailers at a disadvantage. "It is clear that the small duty exemption policy has caused the competitive environment to tilt towards digital merchants, both foreign and local.
As a result, these merchants often evade tax obligations or pay lower tariffs compared to local retailers, which allows them to offer products at lower prices," PRA said in the letter.
The organization also added that while the rules have proven effective in the past, existing rules and policies must be revisited, especially import orders from China, which, while individually small, collectively resemble large-scale smuggling, gradually harming local businesses.
