Republic of the Philippines
HOUSE OF REPRESENTATIVES
Batasang Pambansa, Quezon City

FIFTEENTH CONGRESS
First Regular Session

HOUSE BILL NO. __2989

INTRODUCED BY REP. JOSEPH VICTOR G. EJERCITO

EXPLANATORY NOTE

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 goods 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.

In view thereof, immediate approval of this bill is requested.

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JOSEPH VICTOR G. EJERCITO


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Batasang Pambansa, Quezon City

FIFTEENTH CONGRESS
First Regular Session

HOUSE BILL NO. _ 2989.

INTRODUCED BY REP. JOSEPH VICTOR G. EJERCITO

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, RELIEF PURPOSES

Be it enacted by the Senate and the 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 per cent (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 FURTHER, 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 FURTHERMORE, 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
FURTHERMORE, THAT THOSE DONATIONS OF FOOD,
MEDICINE AND EQUIPMENT FOR US IN 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.

SEC 2. Within sixty days from the enactment of this law, the
Secretary of Finance shall promulgate the implementing rules of this
law.

SEC 3. In case any provision of this Act is declared unconstitutional or
invalid, the other provisions hereof which are not affected thereby
shall continue in full force and effect.

SEC 4. Fffectivity. - This Act shall take effect upon its approval.

Approved,