The paper provides background information on the operational aspects of duty free stores (DFS) in the Philippines. It also identifies certain loopholes and abuses arising from the operations of DFS and recommends steps which should be effectively and efficiently implemented to address such loopholes and abuses.
There are two general types of DFS operating in the Philippines, viz.: (a) Duty Free Philippines which is a government entity attached to the Philippine Tourism Authority; and (b) duty free stores which are owned by private enterprises. Items sold in DFS are exempt from taxes and duties. However, there are quantity and amount limits. Any purchase in excess of such limits shall be subject to taxes and duties.
The operations of DFS are often faulted due to a number of loopholes, e.g., non-observance of duty free shopping limits; sales to non-qualified buyers, operation of DFS outside of international ports, among others.
