Govt yielding ₧14-B revenue from vaccine tax exemption
THE government expects at least a total of P14 billion in forgone revenues from giving value-added tax (VAT) exemption to importations of Covid-19 vaccines.
Finance Assistant Secretary Maria Teresa S. Habitan said this was based on the estimate conducted by the Department of Finance (DOF) should the government be able to purchase 75 million doses of Covid-19 vaccines this year.
“Around P14 billion in revenues forgone from VAT [valueadded tax], assuming 75 million doses of vaccines priced @1,545/ dose,” Habitan said in a message to the Businessmirror on Thursday.
Habitan said the computation was based on the VAT exemption provided for Covid-19 vaccines under the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act, which is already awaiting President Duterte’s signature.
Finance Secretary Carlos G. Dominguez III said earlier this month that the Philippines, together with the help of the private sector, expects to get a total of about 178 million Covid-19 vaccine doses, good for 92 million individuals, to ensure that 100 percent of the country’s adult population gets inoculated.
Of the 178 million doses, Dominguez said around 106 million doses will be covered by the loans negotiated by the government with the Asian Development Bank, World Bank (WB) and the Asian Infrastructure Investment Bank (AIIB), while the Covax Facility will deliver another 40 million doses of the vaccine.
Meanwhile, the DOF also announced on Thursday that Dominguez also approved the inclusion of all Covid-19 vaccine importations in the “Mabuhay” or express lane of the DOF, paving the way for expedited processing of tax and duty exemptions of these shipments.
Mabuhay Lane
WITH this, Covid-19 vaccine tax exemption applications in the Mabuhay Lane, which is under the DOF’S Revenue Office, will be processed within 24 working hours.
On top of this, Dominguez also approved the waiving of filing fees for Covid-19 vaccine applications under the Mabuhay Lane, as well as the use of the Tax Exemption System (TES) Online Filing Module in processing the vaccine imports “to further support the government’s rollout of the Covid-19 vaccination program.”
Filing fees are based on the value of the importation and these must be paid upon submission of request or application under the Mabuhay Lane. The filing fee could go as low as P200 for importations with value of P100,000 and below. For importations with value of over P1 million, a P1,000 filing fee must be paid, according to DOF’S Revenue Office Tax Exemption Manual.
These tax exemption policies will be incorporated in the interagency guidelines on the implementation of a One-stop Shop for International Donations and Government-procured Covid-19 Vaccines that is being prepared by the DOF, the Department of Health, the Department of Foreign Affairs, the Bureau of Customs, and the Food and Drug Administration.
Dominguez made these decisions following the recommendations of Finance Undersecretary Antonette Tionko, who heads the DOF’S Revenue Operations Group (ROG).
Tionko pushed for the inclusion of Covid-19 vaccine imports in the Mabuhay Lane, “regardless of the applicable legal basis,” to “allow for the expedited processing of the tax and exemption of such applications.”
Under DOF Department Order 542000, the Secretary of Finance is authorized to include additional sectors that may avail themselves of the express service under the Mabuhay Lane.
“We add that the Mabuhay Lane currently processes all Relief Consignment under Section 120 in relation to Section 121 of the Customs Modernization and Tariff Act (CMTA). The Lane is expected to process all Covid-19 vaccines which may qualify as relief consignment,” Tionko said.
Relief consignment refers to goods donated to national government agencies and accredited private entities for free distribution to, or for the use of, victims of calamities.
Under Section 121 of the CMTA, relief consignment imported during a state of calamity and intended for the use of calamity victims shall be exempted from the payment of duties and taxes.
The Mabuhay Lane, which was created on May 13, 1994, through DOF Department Order 29-94, is tasked to expeditiously process applications for the tax and duty exemption of certain groups of importers, which include export-oriented firms, returning residents (balikbayan) and nonprofit, nonstock educational institutions.