Importations Related to COVID-19 Declared Tax Exempt

IMPORTED GOODS, supplies and equipment, including test kits and protective equipment needed for containing the coronavirus disease 2019 (COVID-19) outbreak, as well as imported materials needed to manufacture these products have been declared exempt from all taxes, duties and fees, the Bureau of Customs said.

In Customs Administrative Order (CAO) 07-2020 released Wednesday, the BoC said such imports are exempt from value-added tax (VAT), excise tax and other fees.

The exemption was also outlined in Revenue Regulations (RR) No. 6-2020, which was also issued Wednesday.






According to CAO 07-2020 and RR 6-2020, these tax exemptions will be implemented and “in full force” during the three-month validity of Republic Act. No. 11469 or the “Bayanihan to Heal as One Act.”

The exemption covers COVID-19 testing kits; personal protective equipment (PPE) such as gloves, gowns, masks, goggles, and face shields; surgical equipment and supplies; laboratory equipment and reagents; and medical equipment, devices and tools, as well as other items to be identified by the Department of Health (DoH).

Other imported items declared exempt were medical consumables such as alcohol, sanitizers, tissue, thermometers, hand soap, detergent, sodium hypochlorite, cleaning materials, povidone iodine, and common medicines such as paracetamol, mefenamic acid, vitamins, hyoscine, oral rehydration solution and cetirizine.

Further, “importation of materials needed to make health equipment and supplies deemed critical or needed to address the current public health emergency” are also exempt from taxes, duties, VAT, excise tax and other fees.

Only manufacturers in the “master list” of the Department of Trade and Industry and other incentive-granting bodies can avail of the exemption, the BoC said.

“Donations of these imported articles to or for the use of the national government or any entity created by any of its agencies which is not conducted for profit, or to any political subdivision of the government are exempt from donor’s tax and subject to the ordinary rules of deductibility under existing rules and issuances,” according to RR 6-2020.

CAO 07-2020 and RR 6-2020 implement Section 4 (o) of the “Bayanihan to Heal as One Act,” stating to “liberalize the grant of incentives for the manufacture or importation of critical or needed equipment or supplies for the carrying-out of the policy declared herein, including healthcare equipment and supplies: Provided that importation of these equipment and supplies shall be exempt from import duties, taxes and other fees.”

Even before the issuance of the implementing rules, Customs Assistant Commissioner Vincent Philip C. Maronilla said in a mobile phone message that the bureau has been implementing the tax exemption “provisionally.”

Separately, the BoC said Tuesday that it seized P15 million worth of alleged smuggled personal protective equipment in Manila, recovering gloves, facemasks and goggles.

“Smuggled PPE may pose a health risk to users since such items may not comply with the safety standards set by the government rendering them not fit for human utilization,” the BoC said in a statement Wednesday.

As of Tuesday, the BoC processed more than 3,800 shipments of PPEs.

Also Wednesday, the BoC released CAO 06-2020 implementing conditional tax or duty-exemption on imports of coffins and urns, among other items.

Source: Business World Online
https://www.bworldonline.com/imports-needed-for-covid-19-fight-declared-tax-exempt/