Tax exemptions should be given by the government to Filipino companies manufacturing surgical masks, personal protective equipment (PPEs), test kits, ventilators, and other medical products, Sen. Francis Pangilinan said Friday.
He said this would ensure the country had adequate supply of these products during and after the COVID pandemic.
With the pandemic, Pangilinan said authorities had discovered nobody in the country mad these critical medical supplies.
At the start of the pandemic, he said the supply of these critical products and its raw materials became scarce, inaccessible, and expensive.
“Lacking and very costly,” said Pangilinan in his proposed Senate Bill 1759.
“The Board of Investments even convinced the existing manufacturing firms to repurpose their operations. However, these manufacturing firms are still competing with the substandard imported product, fake imported PPEs and the more favored imported PPEs instead of Pinoy-made,” he added.
About two weeks ago, Pangilinan, with Senators Frank Drilon and Risa Hontiveros, exposed the delay in the approval of cheaper, more effective Filipino-made COVID test kits.
Within several hours, the Department of Health approved its use and the price of imported test kits dropped by 26 percent.
“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.
“The proposed measure also mandates to prioritize Filipino-made products. And since experts have been saying it will still take time before we have anti-COVID vaccines, there’s a need for manufacturers of surgical masks PPEs and test kits, among others,” 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 customs 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 a law, the bill shall also exempt the local sales of critical products and services from value-added tax; this VAT-exempted list shall be posted on the website of the Bureau of Internal Revenue 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.