Kiko wants tax breaks for Filipino makers of essential medical supplies

Sen. Francis “Kiko” Pangilinan. INQUIRER.net file photo / CATHY MIRANDA

MANILA, Philippines — Senator Francis Pangilinan has filed a bill seeking to grant tax exemptions to Filipino manufacturers of medical products to ensure sufficient supply during the coronavirus pandemic and similar health emergencies in the future.

“The COVID-19 pandemic exposed the absence of local manufacturers of personal protective equipment (PPE), medicines, and testing kits for the healthcare industry in the country,” Pangilinan said in filing Senate Bill No. 1759 or the proposed Pandemic Protection Act of 2020.

“At the onset of the pandemic, the supply of these critical products and its raw materials became scarce, inaccessible, and expensive,” he added.

The senator said the lack of such supplies prompted the Department of Trade and Industry-Board of Investments to encourage existing manufacturing companies “to repurpose their operations.”

But these firms, Pangilinan noted, have found themselves competing with “substandard imported products, counterfeit imported PPEs, and preference for imported PPEs over local ones.”

“In order to avoid a similar dilemma in the future, this measure seeks to make our local healthcare industry responsive and competitive by giving incentives to local manufacturers and producers of critical products and suppliers of critical services and requiring government procuring entities to give preference to locally made and produced critical products,” Pangilinan said.

If enacted into law, the measure would exempt the local sales of surgical masks, personal protective equipment (PPEs), test kits, ventilators, and other critical medical products and services from value-added tax (VAT).

“This VAT-exempted list shall be posted on the website of the Bureau of Internal Revenue (BIR) through a Revenue Memorandum Circular,” according to the bill.

Pangilinan’s bill would also exempt the importation of capital equipment, spare parts and accessories, raw materials, and other needed articles from custom 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.

Moreover, the measure seeks to require 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.

To date, confirmed COVID-19 cases in the Philippines reached 119,460 with 3,561 new infections.

Of the number, 66,837 have recovered while 1,962 have died, according to health officials.

JPV