Why is there a tax on imported goods?

Taxes on foreign goods provide many governments a way of collecting revenue without creating the public outrage typically associated with increasing income taxes, sales taxes, or other more direct taxation methods.

IMPORTATION
the act, business, or process of importing goods or services Permanency and for gain, either for personal use or for business

Importation of goods is subject to 12% VAT.

Import duty & taxes when importing in the Philippines.

Duty Rates Duty rates in Philippines vary from 0% to 65%, with an average duty rate of 10.5%. Sales Tax Goods imported into Philippines are subject to VAT at a rate of 12% calculated over the CIF value plus any applicable duty. Minimum thresholds When an imports CIF value does not exceed US$ 15 it is exempt of duty. However, VAT is applicable.

Sample Problem: 1. A VAT person imported the following during the month of May: equipment for business use Car for personal use supplies for business use goods for sale locally 2,490,000+12% VAT 500,000+12% VAT 10,000+12% VAT 800,000+12%VAT

the equipment is to be used in business for 7 years.

The computation of credible Input VAT would be: equipment (2,490,000x12%)= Php 298,800/60 car (500,000x12%)= P60,000 supplies (10,000x12%)= P1,200 goods (800,000x12%)= P96,000 credible input VAT

May P4,980 -01,200 96,000 P102,180

June P4,980 -0-

P4,980