l. 
FIFTEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
First Regular Session 
) 
) 
) 
SENATE 
Senate Bill No. 2569 
',,, ., 
Introduced by Senator Manny Villar 
Explanatory Note 
10 ocr 26 F' ]:(14 
This bill seeks to provide an exemption from the imposition of value added tax 
(VAT) on donated imported goods for humanitarian, relief and similar purposes. 
The law, under Section 107 of the National Internal Revenue Code, prescribes 
that every importation shall be subject to Value Added Tax. 
However, this provision hinders the receipt of goods for humanitarian and relief 
purposes, because of the VAT tax imposed. 
It is thus proposed that donated items or gooqs from foreign donors which are for 
non-profit, charitable, humanitarian, relief purposes for the benefit of the poor and the 
needy, should be exempt from payment of the Value Added Tax. 
If such goods are exempt from VAT, it will facilitate the entry and the distribution 
of donations for the benefit of the less fortunate. 
It is earnestly requested that this bill be enacted into law. 
MANNY V LLAR 


FIFTEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
First Regular Session 
) 
) 
) 
SENATE 
Senate Bill No. 2569 
, ',', 
Introduced by Senator Manny Villar 
" 
AN ACT 
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10 
OCT 26 P3:c4 
AMENDING SECIION 107-(A) OF THE NATIONAL INTERNAL REVENUE CODE 
SEEKING TO EXEMPT FROM THE IMPOSITION OF THE VALUE ADDED TAX ON 
DONATED IMPORTATIONS OF ITEMS OR GOODS, WHICH ARE FOR NON-
PROFIT, CHARITABLE, HUMANITARIAN, RELIEF PURPOSES. 
Be it enacted in the Senate and House of Representatives of the Philippines in 
Congress assembled: 
Section 1. Section 107 (A) of the National Internal Revenue Code is hereby 
amended to read as follows: 
SEC. 107. Value-Added Tax on Importation of Goods. 
(A) In General. -There shall be levied, assessed and collected on every 
importation of goods a value-added tax equivalent to ten percent (10%) based 
on the total value used bY,the Bureau of Customs in determining tariff and 
customs duties plus customs duties, excise taxes, if any, and other charges, 
such tax to be paid by the ':importer prior to the release of such goods from 
customs custody: Provided,'That where the customs duties are determined on 
the basis of the quantity or volume of the goods, the value-added tax shall be 
based on the landed cost plus excise taxes, If any. PROVIDED THAT 
DONATED ITEMS OR GOODS FROM DONORS ABROAD WHICH ARE FOR 
NON-PROFIT, CHARITABLE, HUMANITARIAN, RELIEF PURPOSES SHALL 
BE EXEMPT FROM VALUE ADDED TAX UNDER THIS PROVISION. 
PROVIDED FURTHER, THAT THOSE SUBJECT OF EXEMPTION OF 
IMPORT DUTIES UNDER'THE TARIFF AND CUSTOMS CODE SHALL 
LIKEWISE BE EXEMPT FROM THE PAYMENT OF THE VALUE ADDED 
TAX. PROVIDED FURTHER, THAT THOSE DONATIONS OF FOOD, 
MEDICINE AND EQUIPMENT FOR USE rN. THE GOVERNMENT RELIEF 
AND REHABILITATION PROGRAMS FOR CALAMITY AFFECTED AREAS 
AS MANDATED IN PRESIDENTIAL MEMORANDUM ORDER NO. 36 
SERIES OF 1992, WHICH HAVE BEEN ApPROVED FOR EXEMPTION 
FROM IMPORT DUTIES,. SHALL LIKEWISE BE EXEMPT FROM THE 
VALUE ADDED TAX .. 
Section 2. Within sixty-days from the enactment of this law, the Secretary of 
Finance shall promUlgate the imp' !ementing rules of this taw. 


Section 3. Should any of th,e provisions above be held unconstitutional, then the 
remaining provisions shall remain effective. 
Section 4. This Act shall take effect upon its approval. 
Approved.