A HOUSE leader on Wednesday underscored the importance for the country to have an adequate and readily available supply of critical products such as medicines, vaccines, personal protective equipment (PPEs) and ventilators needed in the continuing fight against the coronavirus disease-19 (COVID-19) pandemic.
To do so, Deputy Speaker and Camarines Sur Rep. LRay Villafuerte has filed a bill exempting from the payment of taxes and customs duties all goods in the entire chain of the manufacture, production and distribution of these products that have been in huge global demand since the unprecedented health and economic crisis seized the world at the onset of 2020.
Under House Bill (HB) No. 7135 or the proposed “Pandemic Protection Act,” Villafuerte also proposed that local-based manufacturers who export these critical products be required to supply as high as 80 percent of their goods to the domestic market.
“This measure promotes and protects the manufacture or production of critical products, including repurposing of existing manufacturers, and supply of critical services. This includes their entire supply chain including their raw materials, packaging and its raw materials,” Villafuerte said in HB No. 7135.
Villafuerte said the intention of the bill “is to be able to adopt efficient and effective measures that will prevent the overburdening of the healthcare system and, at the same time, develop the healthcare and manufacturing industries by also preserving and generating employment during the crisis.”
The tax breaks proposed under HB 7135 will last for three years or until the World Health Organization (WHO) declares the end of the pandemic, said Villafuerte, who was the lead author in the House of Republic Act (RA) No. 11469 or the Bayanihan to Heal as One Act.
Villafuerte was a member of the Joint Congressional Oversight Committee that monitored the implementation of RA 11469, and is co-chairman of the social amelioration cluster of the House Defeat COVID-19 Ad Hoc Committee (DCC) chaired by Speaker Alan Peter Cayetano.
To ensure an adequate and responsive supply of critical products and supplies during the pandemic, HB 7135 requires the government as procuring entity to give preference and procure critical products manufactured, produced or made in the Philippines.
The award of the contract for such critical supplies “shall be made to the lowest domestic manufacturer-bidder provided the bid is not more than twenty percent (20%) in excess of the lowest foreign bid” and that the bidder “has secured from the DTI a certification that the products, articles, materials, or supplies are produced, made or manufactured in the Philippines.”
Villafuerte said that as part of the HB 7135-proposed incentives for manufacturers, such local sales shall be classified as export sales so the firms could meet their export requirements.
“As such, the corresponding treatment, exemption on duties, taxes and fees, and other incentives warranted under the existing laws governing these export enterprises shall continue to apply,” his bill states.
These tax exemptions on local sales also cover export enterprises located in special economic zones (SEZs) with the status of separate customs territory under relevant laws.