Gov’t lists imports needed for COVID-19 fight exempt from taxes

customs credit philstar 1 - Gov’t lists imports needed for COVID-19 fight exempt from taxesPhoto credit: The Philippine Star

The government exempted from import duties, taxes and fees critical equipment, supplies and raw materials needed to manufacture medical products that will help manage the coronavirus disease 2019 (COVID-19) outbreak.

The Departments of Finance (DoF) and Trade and Industry (DTI) issued Joint Memorandum Circular (JMC) 2020-02 dated March 28 to “grant exemption of importation of critical or needed equipment or supplies from import duties, taxes and other fees and simplified release of said imported goods.”

JMC 2020-02 also exempted raw materials and packaging materials used in the manufacture of products deemed essential for the COVID-19 containment effort.

It ordered incentive-granting agencies to submit a master list of importers of equipment or supplies eligible for the incentives.

Covered enterprises include manufacturers of such products, suppliers of raw materials, manufacturers of packaging materials and suppliers of raw materials for the packaging. 

“Regardless of the country of origin, importation by the covered enterprises of the raw materials, packaging and its raw materials, or any articles needed in the supply chain of the covered products, such as capital equipment, spare parts and accessories, shall be exempt from import duties, taxes and fees such as import processing fees and other fees imposed by the Bureau of Customs (BoC).”

The JMC said that the businesses availing of the exemption will have to continue operating at “full capacity” to ensure that the supply of these essential products are available and sufficient.

Businesses will also need to partner with government agencies on manufacturing the products and prioritize and accept procurement contracts “under fair and reasonable terms.” 

These tax exemptions will be implemented during the three-month validity of Republic Act. No. 11469 or the “Bayanihan to Heal as One Act.”

Covered by the exemption are medicines identified as “critical and necessary” by the Health department; test kits, thermal scanners, ventilators, personal protective equipment such as helmets, masks, goggles, gloves, foot cover, face shields, gowns and other garments, surgical equipment and supplies, laboratory equipment and reagents, support and maintenance for laboratory and medical equipment, medical supplies, tools and consumables such as alcohol, sanitizers, tissue, hand soap, detergent, sodium hypochlorite, cleaning materials, povidone iodine; common medicines such as paracetamol, mefenamic acid, vitamins, hyoscine, oral rehydration solution and cetirizine, as well as other supplies or equipment determined by the Health department. 

The BoC and Bureau of Internal Revenue had released various issuances exempting these products from value-added tax (VAT), excise tax, Customs duties and other fees.

The BoC was also ordered to provide a “super green lane” for the covered products to expedite processing and release. — Beatrice M. Laforga

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