Republic of the Philippines
House of Representatives
Quezon City, Metro Manila

FIFTEENTH CONGRESS
First Regular Session

House Bill No. 840

Introduced by: REPRESENTATIVE JOCELYN S. LIMKAICHONG

Explanatory Note

This bill seeks to provide an exemption from the imposition of Value Added Tax
(VAT) to those imported goods donated for humanitarian, relief and similar purposes.

‘The law, under Section 109 of the National Internal Revenue Code (NIRC), as
amended, provides for transactions which are exempted from VAT.

However, this provision hinders the importation of goods for humanitarian and relief
purposes, because of the VAT imposed.

It is thus proposed that donated importations of articles or goods, 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 VAT.

If such imported goods are exempt from VAT, there will be an influx of donations
imported for the benefit of the less fortunate.

In view of the foregoing reasons, the approval of this bill is garnestly sought.

1" District, Negros Oriental


Republic of the Philippines
House of Representatives
Quezon City, Metro Manila

FIFTEENTH CONGRESS
First Regular Session

House Bill No. 840

Introduced by: REPRESENTATIVE JOCELYN S. LIMKAICHONG

AN ACT
EXEMPTING FROM VALUE ADDED TAX THE IMPORTATIONS OF DONATED
ARTICLES OR GOODS, WHICH ARE FOR CHARITABLE, HUMANITARIAN, RELIEF
AND SIMILAR PURPOSES AMENDING FOR THE PURPOSE SECTION 109 OF THE
NATIONAL INTERNAL REVENUE CODE (NIRC) OF 1997, AS AMENDED.

Be it enacted by the Senate and the House of Representatives of the Philippines in Congress
assembled:

Section 1. Section 109 of the National Internal Revenue Code of 1977, as amended, is
hereby further amended to read as follows:

“SEC. 109. Exempt Transactions. —

(1) Subject to the provisions of subsection (2) hereof, the following transactions
shall be exempt from the value-added tax:

(A) xxx
XxX
XxX

(V) IMPORTATION OF DONATED ARTICLES OR GOODS SUCH
AS, BUT NOT LIMITED TO, FOOD, CLOTHING, MEDICINES AND
EQUIPMENT WHICH ARE INTENDED FOR CHARITABLE,
HUMANITARIAN, RELIEF AND SIMILAR PURPOSES;

(W) Sale or lease of goods or properties or the performance of services
other than the transactions mentioned in the preceding paragraphs, the
gross annual sales and/or receipts do not exceed the amount of One
Million Five Hundred Thousand Pesos (Ph1,500,000.00): Provided, That
not later than January 31, 2009 and every three (3) years thereafter, the
amount herein stated shall be adjusted to its present value using the
Consumer Price Index as published by the National Statistics Office
(NSO);


Sec. 2. Implementing Rules and Regulations. ~ The Secretary of Finance shall, upon
recommendation of the Commissioner of Internal Revenue, promulgate the necessary rules
and regulations for the effective implementation of this Act.

Sec. 3. Separability Clause. ~ If any section or provision of this Act is declared to be
unconstitutional, the other sections or provisions hereof which are not affected thereby shall
continue to be in full force and effect.

Sec. 4. Repealing Clause. ~ All laws, decrees, executive orders, rules and regulations,
and other issuances, or any part thereof, which are inconsistent with this Act are hereby
repealed, amended or modified accordingly.

Sec. 5. Effectivity.- This Act shall take effect fifteen (15) days after its publication in
the Official Gazette or in at least two newspaper of general circulation whichever comes

earlier,

Approved.