Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

NINETEENTH CONGRESS
First Regular Session

House BILL No.» 60

Introduced by Representative Jaime R. Fresne

EXPLANATORY NOTE

This piece of legislation seeks to exempt the importation of critical medical products,
essential goods, equipment and supplies to address public health emergencies from import
duties, taxes and other fees. It is a crucial proposal intended to fill a policy gap on how the
country responds to such emergencies

The county must always be prepared to deal with situations that threaten the health and
endanger the lives of our people. Government must, at all times, be ready to respond to public
health emergencies effectively and efficiently to cushion their effects and prevent them from
becoming disasters. The county must therefore have the capacity to act swiftly and decisively
during public health emergencies as time is of the essence in dealing, with the lives of people

Itis therefore a primordial concern that we must have the wherewithal to address public
health emergencies such as critical medical products. essential goods, equipment and supplies.
Some of these may have to be imported into the country and any impediment therefore that
may affect their availability and accessibility to our people. such as import duties. taxes and
other fees. must be waived. Government must willingly give up these revenue sources as it will
result to more lives saved.

For the foregoing reasons, the urgent passage of this bill is earnestly sought, 9

Lone District, Muntinlupa City


Republic of the Philippines
HOUSE OF REPRESENTATIVES,
Quezon City, Metro Manila

NINETEENTH CONGRESS
First Regular Session

House BILLNo.-_60

Introduced by Representative Jaime R. Fresnedi

AN ACT
EXEMPTING CRITICAL MEDICAL PRODUCTS, ESS! AL GOODS, INPUTS
RAW MATERIALS, AND EQUIPMENT FROM TAXES, DUTIES, AND OTHER FEES
DURING PUBLIC HEALTH EMERGENCIES

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

SECTION 1. Short Title. ~ This Act shall be referred to as the “Public Health
Hmergeney Tax Exemption Act.”

SEC. 2. Declaration of Policy. — \t is hereby declared the policy of the State to ensure
and protect the health and safety of the people. The State shall continuously adopt mechanisms
that would enhance its capacity to address threats to the health security of the citizenry. Toward
this end, it shall minimize barriers that impede the State’s capacity to cope with COVID-19 and
other public health emergencies

SEC. 3. Definition of Terms, ~ As used in this Act

(a) Critical medical products refer to vaccines and other necessary medicines to
contain Public Health Emergencies;

(b) Essential goods refer to personal protective equipment (PPE) such as gloves,
gowns, masks, goggles, and face shields; surgical equipment and supplies; laboratory equipment
and its reagents, medical equipment and devices; support and maintenance for laboratory and
medical equipment, surgical equipment and supplies: medical supplies, tools, and consumables
such as alcohols, sanitizers, tissue papers, thermometers, hand soaps, detergents, sodium
hypochlorite, cleaning materials, povidone iodine; testing kits, and such other supplies or
equipment as may be determined by the Department of Health (DOH) and other relevant
government agencies;



(c) — kgaipment for waste management refers 10 waste segregation, storage, collection,
sorting, treatment, and disposal services: Provided, That these equipment, technologies, and
services are approved by the Department of Environment and Natural Resources (DENR), DOH,
or other concerned regulatory agencies:

(d) Inputs, raw materials, and other equipment refer to those necessary for the
manufacture or production of essential goods related to the containment or mitigation of Public
Health Emergencies: Provided, That for the purpose of qualifying for exemption from import
duties, Value-Added Tax (VAT), and other fees and for ensuring the supply of PPE at competitive
prices, the Department of Trade and industry (DTI) shall certify that the inputs, raw materials,
and equipment being imported are not locally available or are of insufficient quality and
preference: Provided, further, That preference is given to products, materials and supplies
produced, made, or manufactured in the Philippines;

(e) Private firmy refer to corporations, partnerships and other entities in the private
sector lawfully authorized to engage in trade, business, commerce, and other income-generating
enterprises including the provision of various services to the public and employing at least fifty
(50) persons; and

(Public Health Emergency refers to an occurrence or imminent threat of an illness
or health condition that

(1) Is caused by any of the following:
(i) Bioterrorism:
(ii) Appearance of a novel or previously controlled or eradicated infectious
agent or biological toxin;
(iii) A natural disaster,
(iv) A chemical attack or accidental release:
(v) A nuclear attack or accident: or
(vi) An attack or accidental release of radioactive materials. and

(2) Poses a high probability of any of the following:

(i) A large number of deaths in the affected population;

(ii) A large number of serious injuries or long-term disabilities in the affected
population;

(iii) Widespread exposure to an infectious or toxic agent that poses a significant
risk of substantial harm to a large number of people in the affected
population;

(iv)International exposure to an infectious or toxic agent that poses a significant
risk to the health of citizens of other countries; or (v) Trade and travel
restrictions.

SEC. 4. Coverage. The provisions of this Act which exempt private firms, National
Government and its instrumentalities, or local government units (LGUs) from taxes, duties, other:
fees, and export threshold requirements shall be effective from January |, 2021 to December 31,



Beginning January 1, 2024, the availment of the exemptions and tax benefits under
Sections 5, 6, 7, 8 and 9 of this Act shall require a declaration of a Public Health Emergency by
the President.

SEI ‘xemption from VAT, Customs Duties and Other Fees for Private Firms.
Notwithstanding any law to the contrary, the sale or importation of critical medical products,
essential goods, equipment for waste management, inputs, raw materials, and other equipment
by private firms shall be exempt from VAT, customs duties, and other fees: Provided, That the
Secretary of Health and Secretary of Finance shall determine and periodically issue the list of
ctitical medical products, essential goods, equipment for waste management, inputs, raw
materials, and other equipment eligible for such exemption.

SEC. 6. Exemption from VAT, Customs Duties and Other Fees for the National
Government and its Instrumentalities, or LGUs. — The procurement, importation, storage,
transport, distribution, sale, and administration of critical medical products and essential goods
by the National Government and its instrumentalities, or LGUs, shall be exempt from VAT,
customs duties, and other fees: Provided, That the Secretary of Health and Secretary of Finance
shall determine and periodically issue the list of critical medical products and essential goods
eligible for such exemption

SEC. 7. Exemption from Donor’s Tax and Other Fees for Private Firms, National
Government and its Instrumentalities, or LGUs. ~ Donations of critical medical products,
essential goods, equipment for waste management, inputs, raw materials, and other equipment
to private firms, National Government and its instrumentalities, or LGUs, shall be exempt from
donor’s tax and other fees: Provided, That the Secretary of Health and the Secretary of Finance
shall determine and periodically issue the list of critical medical products, essential goods,
equipment for waste management, inputs, raw materials, and other equipment eligible for such
exemption.

SEC. 8. Exemption from Export Requirements, ~ The Secretary of Finance, upon the
recommendation of the Secretary of Health and the Secretary of Trade and Industry, may suspend
the threshold on required export sales for availment of privileges under Title XIII of the National
Internal Revenue Code of 1997, as amended, for goods critically needed for the prevention,
control, and treatment of COVID-19 or other causes of a Public Health Emergency during the
effectivity of this Act, or for specific business enterprises manufacturing such goods: Provided,
That such exemptions shall be subject to a periodic review: Provided, further, That the Secreta
of Finance, upon the recommendation of the Secretary of Trade and Industry and the Secretary
‘of Health, may make such exemptions conditional upon meeting certain quota on volume of
output for supplying domestic needs,

SEC. 9. Tax Deduction. ~ The Secretary of Finance, upon the recommendation of the

Secretary of Health or the Secretary of Trade and Industry, may direct the Commissioner

of Internal Revenue to issue regulations to allow expenses incurred by private firms, as defined

in this Act, as deductions from gross income in computing their taxable income in accordance
with the provisions of the National Internal Revenue Code of 1997, as amended


SEC. 10. Liberalization of Import Procedures, ~The Bureau of Customs, in consultation
with other concerned agencies, is hereby mandated to formulate liberalized procedures to
expedite the entry of critical medical products, essential goods, equipment, and supplies to
address public health emergencies in the country.

SEC. 11. Implementing Rules and Regulations. ~ Within thirty (30) days from the
effectivity of this Act, the Department of Finance shall, in consultation with the DOH and the
DTI, issue the implementing rules and regulations for this Act

SEC. 12. Separability: Clause. — If any provision or part hereof is declared invalid or
unconstitutional, the other provisions not affected thereby shall remain in full force and effect.

SEC. 13. Repealing Clause. ~ All laws, decrees, executive orders, rules and regulations
contrary to or inconsistent with the provisions of this Act are hereby repealed or modified
accordingly.

SEC. 14. Effectivity. This Act shall take effect after fifteen (15) days following its
complete publication in the Official Gazette or in a newspaper of general circulation.

Approved,