Tax cuts sought for local makers of critical medical supplies

Manufacturers relocating or expanding operations in the country are also qualified to avail themselves of this exemption as long as they meet the requirements. (Pixabay photo)

MANILA – Senator Francis Pangilinan on Friday urged for the immediate passage of a bill seeking to provide tax exemptions for local manufacturers of surgical masks, personal protective equipment (PPE) sets, test kits, ventilators, and other medical products in order to ensure adequate supply during and after the coronavirus disease 2019 (Covid-19) pandemic.

“Isiniwalat ng pandemya na wala dito sa Pilipinas ang gumagawa ng mga critical na mga medical supplies na ito (The pandemic has shown that makers of these critical supplies are not in the Philippines). At the onset of the pandemic, the supply of these critical products and its raw materials became scarce, inaccessible, and expensive,” he said in calling for the approval of his Senate Bill (SB) 1759.

Pangilinan said the measure seeks to give incentives to local manufacturers and producers of these critical products and suppliers of critical services “to avoid a similar dilemma in the future”.

He also said the proposed measure mandates the government to prioritize the purchase of locally-made medical supplies.

“At dahil ayon sa mga eksperto, matagal-tagal pa bago magkaroon ng bakuna kontra-Covid-19, kailangang masiguro na merong mga gumagawa ng mga surgical masks, PPE (sets), test kits, mga gamot dito sa Pilipinas para sa mga Pilipino (And because experts have said that it will take time before a Covid-19 vaccine is available, we should ensure that there will be manufacturers of PPEs, test kits and medicines here in the Philippines for Filipinos),” Pangilinan said.

In SB 1759, or the proposed Pandemic Protection Act of 2020, importation of capital equipment, spare parts and accessories, raw materials, and other needed articles shall be exempt from customs duties, value-added tax (VAT), other taxes and fees such as import processing fees and fees imposed by the Bureau of Customs (BOC), the Food and Drug Administration (FDA), and other relevant agencies.

Once enacted into law, the bill shall also exempt the local sales of critical products and services from VAT. The VAT-exempted list shall be posted on the website of the Bureau of Internal Revenue (BIR) through a Revenue Memorandum Circular.

Manufacturers relocating or expanding operations in the country are also qualified to avail themselves of this exemption as long as they meet the requirements.

Moreover, the bill requires businesses that produce and export critical products or services to supply up to 80 percent of their daily production to government institutions, hospitals, and private establishments for local and domestic use.

“Magagawa nating pasiglahin ulit ang ating ekonomiya sa pagtuon ng ating manufacturing sector sa mga pangangailangang medikal ngayong pandemya. Gagaling na ang mga maysakit, gagaling pa ang ating ekonomiya (We can rejuvenate our economy by focusing our manufacturing sector in the production of medical needs in this pandemic. The patients will recover, and so will our economy),” Pangilinan said.