MODULE 5

BSCA 1106 - REJANO ERIKA N.

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TOPIC OUTLINE
 ORIGIN OF TARIFF
• The word "Tariff" originated from old Spanish coast town of Tarifa, 21 miles from Gibraltar, which
received its name in the Arab who are said to named it after "Tariff Iban Malik".This historic little town has
existed far more than twelve centuries.
• When the moors, many centuries ago, founded the town of Tarifa, they prepared the way for a system
that is probably the most important factor in the international trade.As the name suggest, this factor is the tariff.
• The mariners called this tribute a tariff and the word became current in England whose vessels formed
the majority in the merchant trade.
• The word has adopted, doubtless for same reason, into the Spanish tarifa (price list, rate book)
Portuguese tarifa (schedule), French tarifa or tariff rate and Italian tarifa (price list), the government of Europe
began to make similar levies on imports and tariff became a prolific source of revenue.
• In the days of the Moors, the tariff was little better than to hold up.
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 TARIFF DISTINGUISHED FROM CUSTOMS
• "Tariff" may be distinguished from "customs" although the two are often used
interchangeably.
• TARIFFS – a term found in many languages, denotes the list of schedules of
commodities with
the particular duties or charges upon each.
• CUSTOMS – is the English term which originally denoted all "customary" tolls
or dues paid by merchants upon commodities on their way to and from the market,
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 MODERN CUSTOMS TARIFF, DEFINED

• Modern customs tariffs are a systematic arrangement of customs duties levied on goods when they
cross the border of a political unit.
• They are an official list of schedules setting forth the several customs duties to be imposed on
imports and export of goods in transit.
• Import duties are by far the most important these modern tariff changes, because practically no self-
governing nation is entirely free of it. For example, the Philippine Tariff Act of 1903, was an import tariff.
• Tariff exerts a profound influence upon international trade.
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 HISTORY OF PHILIPPINE TARIFF
● I. Philippine Foreign Trade during the Pre-Spanish Period

● Spanish document of 1586 narrated that they “are keen traders and have traded with China for many years, and before the
advent of the Spaniards they sailed to Mulloco Malacca, Hazian (probably Anchen, Sumatra), Parani, Brunie and other kingdoms.”

● The customary way of trading with other people was by barter in which the Filipinos offered their home products in exchange
for the products of other countries.
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 I. Spanish Period
• the ancient almojarifazgo (a three (3) percent ad valorem duty) imposed on both imports and
exports was amplified.
• the Philippine customs house was established in Manila by Governor Guido R. de Lavizares
in 1573.
• according to the report of the Viceroy of Mexico to the Spanish King of 1573,
• It took Gonzalo Ronquillo de Penalosa, the fourth Spanish governor-general to impose the
almojarifazgo in 1582.
• Duty on Chinese goods was increased to six (6%) percent in 1606.
• Zamboanga was opened in 1833, Cebu in 1842, Iloilo and Sulu in 1855 and Legaspi and
Tacloban in 1874.
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 • Philippine exports consisted mainly of rice, coconuts, palm oil, sugar, lumber
• luxuries such as sea snails, beches defmerk, edible bird’s nests, tortoise shell, pearls and mother-of-pearls
shells.
• The galleons brought back to Manila Mexican dollars, Spanish wines and manufactures which gave a profit of
100% to 400%.
• 1834 when Philippine trade was opened to the world and ships other than those of Spain permitted to
share in Philippine commerce.
• The Customs house became a distinct department in 1779 and was made an independent branch of the
Treasury in 1805.
• Prior to 1734, these values were assessed by a board composed of a royal officer and two merchants with a
royal fiscal as intervenor.
• In 1734 a permanent board of valuation called as “Junta de Valoraciones”. This was abolished in 1782,
• followed by tariff board in 1828 called “Junta de arancelus”. Trade during the interim was in the hands of
Compania Real de Filipinas.
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 ● The Customs house became a distinct department in 1779 and was made an
independent branch of the Treasury in 1805.

● Prior to 1734, these values were assessed by a board composed of a royal officer and
two merchants with a royal fiscal as intervenor.

● In 1734 a permanent board of valuation called as “Junta de Valoraciones”. This was

abolished in 1782,

● followed by tariff board in 1828 called “Junta de arancelus”. Trade during the interim
was in the hands of Compania Real de Filipinas.
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 TARIFF COMMISION
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 Sec 1600. Chief Officials of the Tariff Commission and Qualifications

CHIEF OFFICIAL OF THE TC

Marilou P. Mendoza
Chairperson

Ernesto L. Albano Marissa Maricosa A. Paderon

Commissioner Commissioner

OFFICE OF THE CHAIRPERSON AND COMMISSIONERS

Gerry P. Gebela Elvira C. Ignacio Ma. Lourdes M. Saluta
Acting Director III Acting Director III Director II
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 OFFICE OF THE CHAIRPERSON AND COMMISSIONERS

Gerry P. Gebela Elvira C. Ignacio Ma. Lourdes M. Saluta

Acting Director III Acting Director III Director II

FINANCE, MANAGEMENT AND SERVICE (FMAS)

RESEARCH, INVESTIGATION AND INTERNATIONAL ADMINISTRATIVE TRADE ANALYSIS SERVICE (RIITAS)

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 Officials of the Tariff Commission shall consist:
• A Chairperson and;
• Two (2) Commissioners
Appointed by the President of the Philippines.

The Chairperson and the Commissioners shall be:

• Natural-born citizens of the Philippines
• Good moral character and proven integrity
• A person with experience and academic training
• who is proficient in tariff and trade matters?

during their terms of office, the chairperson and the Commissioners are not allowed:
• to engage in any profession or
• to intervene in the management or
• control of any private enterprise
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 SEC. 1602. Official Seal
the commissioner is authorized to adopt an official seal

SEC. 1603. Functions of the Commission.

The Commission shall have the following:
(a) Adjudicate cases on the application of trade remedies
(b) Study how tariffs and international trade programs affect the economy;
(c) administer Philippine tariff schedules and tariff nomenclatures;
(d) Issue advance rulings on tariff classification
(e) Provide the President and Congress with independent analysis
(f) Analyze the nature and composition, and the classification of goods
(g) Review the trade agreements
(h) Conduct public consultations and public hearings pursuant to its functions
(i) Rendering rulings on disputes over tariff classification of goods -> shall not extend beyond three (3) years from the
effectivity of this Act
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 SEC. 1604. Reports of the Commission.
the Commission shall provide information to the:
• president and
• any member of Congress
shall conduct investigation
submit reports to the President and Congress of the Philippines
shall report on the first Monday of December each year

SEC. 1605. Access to Documents and Assistance to the Commission.

The Commission is allowed to:
• see any papers,
• records, and
• other evidence related to a matter under investigation.
The Commission may also:
• request the views,
• recommendations, and
• other assistance who shall be expected to cooperate with the Commission
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 SEC. 1606. Sworn and Verified Statements.
The Commission may order the taking of sworn statements at:
• Any stage of any proceeding or
• Investigation before it
Sworn statements must be made:
• Before a person authorized to administer oaths.

SEC. 1607. Implementing Rules and Regulations.

Commission shall promulgate and adopt rules and regulations to implement the law
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 END OF MODULE TEST
1. Compare and contrast tariff from customs. List down atleast five (5) similarities and five (5) differences
CUSTOMS
Duty is a type of indirect tax levied by the government on the consumer on both imported and domestically made items that are part of an intrastate
transaction.
Consumers pay duties, which are akin to indirect taxes. Consumer tax is another term for duty.
Exciting duties and customs duties are examples of popular duties.
Customs duty refers to the taxes placed on products imported. Excise duty is a tax on items made in the United States that are part of an intrastate
transaction.
TARIFFS
Tariffs are levied on items imported or exported by a country's manufacturers to another country. Import duties, excise duties, succession or death duties,
and stamp duties are examples of other obligations. Tariff can also be used to create a broad pricing list.
Tariffs are government-imposed charges on products imported from another nation.
Tariffs are tariffs levied on imported and exported products that are equivalent to direct taxes.
Tariffs can be either import tariffs or export tariffs, depending on whether they are levied on imported or exported products.

2. Enumerate the functions of the Tariff Commission and justify its importance.
(a) Adjudicate cases on the application of trade remedies
(b) Study how tariffs and international trade programs affect the economy; -
(d) Issue advance rulings on tariff classification
(e) Provide the President and Congress with independent analysis
(f) Analyze the nature and composition, and the classification of goods
(g) Review the trade agreements
(h) Conduct public consultations and public hearings pursuant to its functions
(i) Rendering rulings on disputes over tariff classification of goods -> shall not extend beyond three (3) years from the effectivity of this Act
The Tariff Commission is the principal and independent authority on tariff and trade remedies, and a key adviser on non-tariff measures and international
trade issues.
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3. Relate the relevance of Tariff Commission to Customs Border Control and Security.
Review the trade agreements for negotiation and trade agreements entered into by the Philippines and make recommendations, if necessary, on the
consistency of the terms of the agreements with the national policy objectives.
Thank you!
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