FIFTEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
First Regular Session 
) 
) 
) 
SENATE 
S.B. No. 
1411 
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• ,",< 
Introduced by Senator Loren Legarda 
EXPLANATORY NOTE 
This bill seeks to provide an exemption from the imposition of the 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 
lessens or even hinders the receipt of goods used for humanitarian and relief 
purposes. 
It is thus proposed that donated items or goods from foreign donors which 
are exclusively for non-profit, charitable, humanitarian, relief purposes benefiting 
the poor and the needy, should b~ 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. 
With these in mind, passage of this measure is earnestly requested. 
~EN~: 
''''' 
Senator 


FIFTEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
First Regular Session 
) 
) 
) 
SENATE 
S,B.No. 1411 
Introduced by Senator Loren Legarda 
AN ACT 
AMENDING SECTION 107(A) OF THE NATIONAL INTERNAL 
REVENUE CODE SEEKING TO EXEMPT FROM THE IMPOSITION OF 
VALUE ADDED TAX ON DONATED IMPORTATIONS OF ITEMS OR 
GOODS, 
WHICH 
ARE 
FOR 
NON-PROFIT, 
CHARITABLE, 
HUMANITARIAN, AND 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 
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amended to read as follows: 
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SEC. 107. Value-Added Tax on Importation of Goods. 
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(A) In General. - There shall be levied, assessed and collected on every 
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importation of goods a value-added tax equivalent to twelve percent 
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(12%) based on the total value used by the Bureau of Customs in 
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determining tariff and customs duties plus customs duties, excise taxes, if 
lOan y, and other charges, sucH tax to be paid by the importer prior to the 
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release of such goods from customs custody: Provided, That where the 
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customs duties are determined on the basis of the quantity or volume of 
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the goods, the value-added tax shall be based on the landed cost plus 
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excise taxes, if any. PROVIDED, THAT DONATED ITEMS OR 
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GOODS FROM DONORS ABROAD WHICH ARE EXCLUSIVELY 
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FOR NON-PROFIT, CHARITABLE, HUMANITARIAN, AND RELIEF 
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PURPOSES SHALL BE EXEMPT FROM VALUE ADDED TAX 
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UNDER THIS PROVISION: PROVIDED FURTHER, THAT THOSE 
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SUBJECT TO THE EXEMPTION OF IMPORT DUTIES UNDER THE 
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TARIFF AND CUSTOMS. CODE SHALL LIKEWISE BE EXEMPT 
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FROM THE PAYMENT OF THE VALUE ADDED TAX: PROVIDED 
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FURTHER, THAT THOSE DONATIONS OF FOOD, MEDICINE AND 
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EQUIPMENT FOR GOVERNMENT RELIEF AND REHABILITATION 
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PROGRAMS IN CALAMITY AFFECTED AREAS AS MANDATED IN 
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PRESIDENTIAL MEMORANDUM ORDER NO. 36 SERIES OF 1992, 
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WHICH HAVE BEEN APPROVED FOR EXEMPTION FROM 
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IMPORT DUTIES, SHALL LIKEWISE BE EXEMPT FROM THE 
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VALUE ADDED TAX. 
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Section 2. The Secretary of Finance shall promulgate the implementing rules 
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and regulations for this Act, within six (6) months after its enactment. 
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Section 3. If any part or provision of this Act is declared unconstitu tiona!, the 
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remaining provisions hereof not affected thereby shall continue to have the force 
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and effect of law. 
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Section 4. This Act shall take effect upon its approval. 
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Approved, 
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