IMEE: SAVE HEALTHCARE SUPPLY MANUFACTURERS FROM "TAX VARIANT"

Senator Imee Marcos has sought to protect local manufacturers of personal protective equipment (PPE) and other medical supplies from a "tax variant" that the Bureau of Internal Revenue (BIR) released in June.

Marcos was referring to BIR regulation 9-2021 that revokes a 12% value added tax (VAT) exemption on the sale of raw materials, packaging supplies and other services to export-oriented manufacturers that include critical healthcare suppliers.

"This mutation of tax regulation threatens to cancel gains some exporters have already made toward economic recovery and will push them back into a critical state," Marcos said.

Marcos, who chairs the Senate committee on economic affairs, cited the case of garments exporters that have been able to survive the Covid-19 pandemic's economic onslaught by adapting their production to the manufacture of PPE, surgical masks and other medical goods.

However, Marcos said that their meager profits averaging less than 5% may be wiped out by the new BIR regulation imposing the 12% VAT.

For more than a year now, Marcos has been advocating tax exemptions for local makers of critical healthcare products during a health emergency, as proposed in Senate Bill 1708 or the "Healthcare Manufacturing and Pandemic Protection Act."

The bill will not only attract foreign investors but also preserve local jobs, Marcos said.

"During health emergencies, local sales of critical healthcare goods produced by exporters will be treated as export sales. So, these will be exempted from VAT, duties and fees, with export incentives kept intact," Marcos explained.

If demand during a health emergency so requires, manufacturers in special economic zones can devote as much as 80% of their production to local sales which will be credited to their export sale requirements under government rules.

The Marcos bill also mandates the government to procure healthcare supplies from local manufacturers first, as long as their bid prices do not exceed a foreign bidder's lowest bid price by 25%.

"The Department of Health could have avoided the controversy over allegedly overpriced PPEs amounting to Php1.8 billion, had it procured from local manufacturers who can produce the same goods for a much cheaper price," Marcos said.

(Tagalog version)

IMEE: MGA HEALTHCARE SUPPLY MANUFACTURER, ISALBA SA "TAX VARIANT"

Isinusulong ni Senador Imee Marcos na protektahan ang mga lokal na manufacturer ng personal protective equipment (PPE) at iba pang mga medical supply sa "tax variant" ng Bureau of Internal Revenue (BIR) na ipinalabas noong Hunyo.

Tinukoy ni Marcos ang BIR regulation9-2021 na bumawi sa 12% value added tax (VAT) exemption sa pagbebenta ng mga raw materials, packaging supplies at iba pang serbisyo sa mga export-oriented manufacturers kabilang ang critical healthcare suppliers.

"Ang pagbabagong ito sa tax regulation ay nagbabantang ibalik sa kritikal na sitwasyon ang mga exporters na nagrerekober na sana," ani Marcos.

Binanggit ni Marcos, chairman ng Senate committee on economic affairs, ang mga garment exporters na nagawang makaahon sa dagok ng Covid-19 pandemic nang palitan nila ang paggawa ng mga damit ng mga PPE, surgical masks at iba pang medical goods.

Pero, sinabi ni Marcos na ang kanilang kakarampot na kita na mas mababa pa sa 5% ay tuluyang mawawala dahil sa bagong BIR regulation na nagpapatupad ng 12% VAT.

Mahigit sa isang taon na nang itulak ni Marcos ang tax exemptions para sa mga lokal na mga gumagawa ng mga critical healthcare products tuwing may pandemya o health emergency, na nakapaloob sa kanyang inihaing Senate Bill 1708 o ang "Healthcare Manufacturing and Pandemic Protection Act."

Hindi lang makakahikayat sa mga foreign investors ang panukala ni Marcos, bagkus makatutulong pa ito para mapanatili ang mga lokal na trabaho sa bansa.

"Sa panahon ng health emergencies, ang mga local sales ng mga critical healthcare goods na ginagawa ng mga exporter ay itatatratong export sales. Hindi ito papatawan ng VAT, duties at iba pang bayarin, at dapat ding mapanatili ang export incentives para dito," paliwanag ni Marcos.

Dagdag ni Marcos, kapag tumaas ang pangangailangan sa panahon ng health emergency, maoobliga ang mga exporter sa mga special economic zone na gumawa ng 80% ng kanilang mga produkto para sa local sales na maisasama naman sa kanilang export sale requirements sa ilalim ng patakaran ng gobyerno o government rules.

Sa ilalim ng Marcos bill, inoobliga rin ang gobyerno na sa mga local manufacturers muna unang bumili ng mga healthcare supplies, basta ang kanilang presyo ay hindi naman sosobra sa 25% ng pinakamababang presyo ng mga dayuhan.

"Naiwasan sana ng Department of Health ang kontrobersya sa sinasabing overpriced na PPEs na nagkakahalaga ng Php1.8 billion kung bumili sila sa mga lokal na manufacturers na kaya namang gumawa ng kapareho ring produkto pero mas mura ang presyo," diin pa ni Marcos.