Press Release
August 7, 2020

Tax cuts to Filipino makers of PPEs, test kits, other med supplies for COVID response: Pangilinan

TO ENSURE the adequate supply of surgical masks, personal protective equipment (PPEs), test kits, ventilators, and other medical products during and after the COVID pandemic, Sen. Francis "Kiko" Pangilinan seeks to encourage their local manufacture by giving Filipino companies tax exemptions.

"Isiniwalat ng pandemya na wala dito sa Pilipinas ang gumagawa ng mga critical na mga medical supplies na ito. At the onset of the pandemic, the supply of these critical products and its raw materials became scarce, inaccessible, and expensive. Kulang, di-abot, at di abot-kaya," he said explaining his Senate Bill 1759.

"Kinumbinsi pa ng Board of Investments ang mga existing manufacturing firms na mag-repurpose ng kanilang operations. Kaya lang, nakikipagkumpetensya pa rin itong mga manufacturing firms sa mga substandard imported product, pekeng imported PPEs, at mas pinapaborang imported PPEs kaysa sa gawang Pinoy," he added.

About two weeks ago, Pangilinan, together with Senators Frank Drilon and Risa Hontiveros, exposed the delay in the approval of cheaper, more effective Filipino-made COVID test kits. Within a span of several hours, the Department of Health approved its use and the price of imported test kits dropped by 26 percent.

"In order to avoid a similar dilemma in the future, this measure seeks to give incentives to local manufacturers and producers of these critical products and suppliers of critical services," Pangilinan said.

"Inuutos din ng panukalang batas na ito na unahin ang mga produktong ito na gawang-Pilipino. At dahil ayon sa mga eksperto, matagal-tagal pa bago magkaroon ng bakuna kontra-COVID, kailangang masiguro na merong mga gumagawa ng mga surgical masks, PPEs, test kits, mga gamot dito sa Pilipinas para sa mga Pilipino," he added.

In SB 1759 or the Pandemic Protection Act of 2020, importation of capital equipment, spare parts and accessories, raw materials, and other needed articles is exempt from custom duties, VAT, other taxes and fees such as import processing fees and fees imposed by the Bureau of Customs, the Food and Drug Administration, and other relevant agencies.

When it becomes law, the bill shall also exempt the local sales of critical products and services from value-added tax (VAT); this 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 sektor sa mga pangangailangang medikal ngayong pandemya. Gagaling na ang mga maysakit, gagaling pa ang ating ekonomiya," Pangilinan said.

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