Pangilinan eyes tax cuts for PPE makers, medical suppliers

SEN. Francis Pangilinan has sought tax exemptions for Filipino companies to ensure the adequate supply of surgical masks, personal protective equipment (PPE), test kits, ventilators, and other medical products during and after the coronavirus disease 2019 (Covid-19) pandemic.

“Isiniwalatngpandemyanawaladito saPilipinasanggumagawangmga critical na mga medical supplies na ito (The pandemic has brought to the fore the lack of local manufacturers of critical medical supplies). At the onset of the pandemic, the supply of these critical products and its raw materials became scarce, inaccessible, and expensive. Kulang,di-abot,atdi abot-kaya (There is shortage, it is expensive),” Pangilinan said as he explained his Senate Bill (SB) 1759.

The senator said he, with Senate Minority Leader Franklin Drilon and Sen. Ana Theresia Hontiveros, exposed last week the delay in the approval of cheaper, more effective Filipino-made Covid-19 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.

He added that since a Covid-19 vaccine is still far from being available, the measure seeks to ensure that there are Filipino firms manufacturing surgical masks, PPE, test kits and medicines for Filipinos.

SB 1759, or the “Pandemic Protection Act of 2020,” states that the importation of vital equipment, including spare parts and accessories, and other needed articles is exempt from custom duties, value-added tax (VAT) and other fees imposed by the Bureau of Customs, the Food and Drug Administration and other relevant agencies.

When enacted, it shall also exempt the local sales of critical products and services from VAT. This VAT-exempted list shall be posted on the website of the Bureau of Internal Revenue through a 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.