MANILA — The Philippines' Department of Finance (DoF) has turned to the International Monetary Fund (IMF) for help in estimating the potential revenue that would be foregone if the tax exemption on low-value imports were removed, even as a Finance official cautioned that pursuing its removal may not be timely under prevailing conditions.

Finance Undersecretary Karlo Fermin S. Adriano said the department is continuing to study possible changes to the "de minimis" exemption, with problems in shipment value declarations complicating its efforts to produce reliable revenue estimates.

"You cannot have a right revenue estimate. Because the tariff is based on the value, value-added tax (VAT) is also based on the value. So that's where we're having a hard time," he told reporters last week.

"That's why we've even asked the IMF if they have a way to estimate de minimis. If ever we remove de minimis. Even if it's just VAT," he added.

The de minimis rule exempts imported goods valued at P10,000 or less from duties and taxes. The threshold has been in place since 2016 under the Customs Modernization and Tariff Act (CMTA). The term comes from the legal maxim "de minimis non curat lex" — "the law does not concern itself with trifles" — and low-value customs thresholds are a common feature of tariff regimes worldwide, though their size and coverage vary from country to country.

According to Mr. Adriano, however, goods whose value exceeds the threshold can also be declared as de minimis, making it difficult to determine the correct taxes due and to estimate potential collections.

The review also seeks to address what Mr. Adriano described as an uneven playing field between domestic producers and foreign suppliers, particularly in e-commerce. Locally purchased goods may be subject to value-added tax even when their prices fall below P10,000, whereas imported goods that qualify for the de minimis exemption enter the country free of both VAT and tariffs. The tension is not unique to the Philippines: the European Union, for instance, scrapped its VAT exemption for imported consignments valued at €22 or less in July 2021 as low-value cross-border e-commerce parcels multiplied.

"They have a competitive edge, in fact, because there's no tariff, no VAT, nothing," he said.

Mr. Adriano said the review remains active, citing both revenue leakage and concerns over the treatment of local producers.

"We have been studying that, but it may not be timely, even in our current situation," he said.

Removing the exemption would require amending the CMTA, a process that would involve Congress. "Even if we propose it, it will still be (up to) the legislators if they sit on it or not," he said. "If there's an opportunity, maybe us or the next admin, the DoF can push for it." For now, the review's direction hinges on the IMF's estimation work, the accuracy of shipment value declarations, and whether lawmakers eventually take up a CMTA amendment.

Separately, Mr. Adriano said the DoF is also studying a possible excise tax on online gambling.

This article was first published by BusinessWorld on November 2, 2026, under the title "Finance dep't still reviewing 'de minimis' rule," reported by Justine Irish D. Tabile. Source: Bworldonline