DoF guidelines on tax-free imports of PPEs, test kits,  medical supplies

April 07, 2020

The Department of Finance has issued guidelines on the tax and duty exemption of imports of medical equipment and supplies intended for healthcare frontliners to combat the coronavirus disease 2019 pandemic.

“During these difficult times, we have to prioritize measures to facilitate the steady supply of medical products to protect and support our healthcare workers in doing their job of saving their fellow Filipinos from this pandemic,” Finance Sec. Carlos Dominguez III said.

Pursuant to Republic Act 11469 or the “Bayanihan to Heal as One Act,” the DOF issued Revenue Regulations 6-2020 and Customs Administrative Order 7-2020, implementing Section 4(o) of this new law that exempts the importation of personal protective equipment, COVID-19 test kits, medical and laboratory equipment and devices, consumable medical supplies, medicines, and other supplies as may be identified by the Department of Health from the value-added tax, excise tax, duties, and fees.

Aside from the exemption, both orders reiterate that an incentive is available for the importation of materials needed to make health-related equipment and supplies by manufacturers included in the Master List of the Department of Trade and Industryand other incentive-granting bodies.

Internal Revenue Commissioner Caesar Dulay explained that, “Taxation should never hinder humanitarian efforts, especially now that we are in a state of national public emergency while fighting a pervasive and fatal enemy.”

To facilitate speedy customs clearance, CAO  7-2020 relaxes the regulatory clearance process by exempting importers of medical equipment and supplies for commercial purposes from the presentation of the certificate of product notification or certificate of product registration issued by the Food and Drug Administration prior to release by the Bureau, provided that they present a copy of their license to operate and proof of application for product notification with FDA.

In addition, imported health products for donation that are certified by regulatory agencies or accredited third party organizations in the originating countries shall be automatically cleared, while an FDA clearance will not be required prior to release of foreign donations of PPEs, ventilators, respirators and their respective accessories to be used in treating COVID-19 patients.

“We want to ensure that PPEs, test kits, and other medical supplies shipped to the Philippines are released at the soonest time possible. Thus, we are being flexible with rules on the importation of critical medical equipment and supplies during this public health emergency,” Customs  Commissioner Rey Leonardo Guerrero said.

Additionally, RR 6-2020 provides that the covered importations no longer require the issuance of an authority to release imported goods under Revenue Memorandum Order (RMO) No. 35-2002.

Consequently, the BoC would  not require the ATRIG for the release of the said goods. However, the BIR would conduct a post-investigation and audit of the BoC list of importers who have made such imports without any ATRIG.

To ensure that all importations are properly accounted for, the BoC would  submit a daily report to the Finance Secretary on these shipments.

Lastly, the DoF clarified that “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”.

Dominguez acknowledged the efforts of donors from the private and public sector to support the government’s priority plans for the national efforts to prevent the exponential spread of COVID-19.

“We are thankful for the outpouring of support from foreign governments, the private sector, and international partners, as well as local donors ramping up efforts to beat COVID-19,” Dominguez said. “In line with our goal to support the efforts of our frontliners to combat this disease, the DoF is making sure that PPEs and medical supplies that are coming in are to be released right away from Customs and delivered to where medical aid is greatly needed.”

RR  6-2020 and CAO 07-2020 shall immediately take effect after publication.

The DoF has been implementing measures aimed at mitigating the social and economic impact of this highly contagious pathogen that has, to date, infected 2,311 people and killed 96 in the country.

Its efforts are anchored on providing emergency aid to poor and low-income families and other vulnerable sectors, protecting frontline healthcare workers, ensuring better treatment of COVID-19 patients and suspect cases, and keeping the economy afloat and ready for a rebound as soon as the global health crisis is over.