Gov’t removes donor tax for imported PPEs, med supplies for COVID-19 fight

Donations of the now highly valuable personal protective equipment and other medical supplies imported into the Philippines to help in the fight against COVID-19 would not only enjoy tax-free entry but also exemption from donor’s tax, the Bureau of Internal Revenue (BIR) said.

The exemption was laid out in Revenue Regulation No. 6-2020 issued by Finance Secretary Carlos G. Dominguez III and Internal Revenue Commissioner Caesar R. Dulay on April 1 in accordance with provisions of Republic Act No. 11469, or the Bayanihan to Heal as One Act.

The new law gave President Rodrigo Duterte additional powers to deal with the COVID-19 pandemic.

In a statement on Thursday (April 2), the Department of Finance (DOF) said exempt from import duties, value-added tax (VAT), excise and other fees were the following: PPEs, COVID-19 test kits, medical and laboratory equipment and devices, consumable medical supplies, as well as medicines and other supplies identified by the Department of Health (DOH).

To fast-track their release from ports, the BIR also allowed exemption of importations for COVID-19 response from authority to release imported goods (Atrig).

Also, “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 said government are exempt from donor’s tax, and subject to the ordinary rules of deductibility under existing rules and issuances,” the revenue guideline said.

As early as two weeks ago, eight government agencies and the National Disaster Risk Reduction and Management Council (NDRRMC) designated imported medical and emergency supplies as relief consignments after President Rodrigo Duterte declared a state of calamity nationwide because of the pandemic.

Bureau of Customs data showed that between March 9 and April 1, the BOC already released a total of 4,204 PPE shipments.

“We want to ensure that PPEs, test kits, and other medical supplies shipped to the Philippines are released at the soonest time possible,” said Customs Commissioner Rey Leonardo B. Guerrero.

“Thus, we are being flexible with rules on the importation of critical medical equipment and supplies during this public health emergency,” he said.

Dominguez and Dulay also issued RR 7-2020 which reiterated the extension of tax deadlines.

“By moving the statutory and regulatory deadlines for tax compliance, we ensure that taxpayers would be able to fulfill their patriotic duty of paying taxes without any risk to their health and safety,” Dominguez said.

According to RR 7-2020, these deadline extensions may again be extended by Dulay “if the circumstances warrant such an extension or as may be directed” by Dominguez.

All of these BIR issuances apply nationwide amid the lockdown, Dulay said, adding that “taxation should never hinder humanitarian efforts, especially now that we are in a state of national public emergency while fighting a pervasive and lethal enemy.”

Edited by TSB