I hate to be branded anti-nationalistic but I cannot believe what has just transpired within the past two weeks:
A friend and I decided to do online selling of accessories. We searched the web and found one reputable supplier in China. She sells the products for about 1 to 2 bucks a pop. We ordered a hundred pieces and she sent it via DHL. The package came to Manila in less than 48 hours. Impressive.
After a delay of 48 hours we called DHL. Customs was holding my package. No report as to what they were doing with it.
After 5 days, we were pissed. We live in Olongapo. The Customs office in Pasay was like 4 hours away. We could have easily have picked it up but we were optimistic that the package will be delivered to our door. After the fifth clearance delay on the DHL tracking site, we finally received an email:
Value upgraded from USD 51.50 to USD 346.00 by customs, please provide purchase order or telegraphic transfer if not agree to customs assessment.
WTF! Upgraded to 346 USD! What the hell did they see in the package? Last time I checked, I didn’t order half an ounce of gold to be shipped to me. Customs must have taken a peak onto my package and tought that they were real pearls and real stones! 346 USD!
The email contains an excel worksheet which reads as follows:
|INFORMAL COMPUTATION OF DUTY AND TAX|
|Insurance & Other Charges||2%(cost)||4.00|
|DUTIABLE VALUE USD||usd||371.00|
|x rate of exchange||46.023|
|DUTIABLE VALUE PHP||php||17,074.53|
|X rate of duty||10%|
|CUSTOMS DUTY Php||php||1,707.45|
|DUTIABLE VALUE PHP||17,074.53|
|CUSTOMS DOCUMENTARY STAMPS||265.00|
|IMPORT PROCESSING FEE||250.00|
|LANDED COSTS PHP||php||23,410.99|
|x vat rate||12%|
|VALUE ADDED TAX||2,809|
|IMPORT PROCESSING FEE||250|
|TOTAL DUTIES & TAXES Php||8,180|
|DUTY HANDLING FEE||280.00|
|INFORMAL ENTRY DECLARATION||298.60|
|TOTAL FEES Php||Php||9,207.12|
A tax and charges equivalent to 200 dollars! I paid my supplier 100 dollars and the PHILIPPINE GOVERNMENT charged me for 200% what I paid for it! This experience is a rarity. TAX A PHILIPPINE DOCTOR 200%. And I was only trying to venture into business for the 3rd time. I got scammed twice. Now that I finally thought it was finally going to be a big break, i get scammed by MY GOVERNMENT.
What does “INFORMAL” mean? Why inform me after 5 days then charge me for 5 days? Informal Entry declaration? Import Processing Fees?
I informed my supplier right away. She told me this was the first time her products got taxed that high. She was apologetic but really she don’t need to. This kind of things happen ONLY IN THE PHILIPPINES!
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For entrepreneurs and startups viewing this post I suggest you see my latest article:
How to Circumvent Hefty Customs Tax and Start Your eCommerce Business Right