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

TWENTIETH CONGRESS
First Regular Session

HOUSE BILLNO. _543

Introduced by Representative Jaime R. Fresnedi

EXPLANATORY NOTE

This bill seeks to exempt the importation of critical medical products, essential goods,
equipment, input and raw materials necessary for public health emergencies. In so doing, we
ensure and protect the health and safety of our fellow Filipinos through our capacity in
providing them with efficient and quality healthcare that is both accessible and readily available
to them at all times.

The COVID-19 pandemic, which emerged in late 2019. has had profound and far-
reaching impacts on societies worldwide. It exposed vulnerabilities in healthcare systems,
underscored the importance of access to critical medicines, and highlighted the need for
proactive legislative measures to ensure public health and well-being during times of crisis.
How the country responds and plans in advance should a public health emergency occur once
more in the future is therefore a primordial concern that could help save thousands of lives.
The government is thereby called to address this specific policy gap by coming up with
preemptive measures that could benefit our public health system, regardless if we lose certain
sources of revenue or not.

This legislation represents a proactive approach to safeguarding public health by
ensuring affordable access to critical medicines during health crises like the COVID-19
pandemic. By reducing the financial burden on individuals and healthcare systems, it aims to
enhance our collective ability to respond to emerging health threats effectively. It is a crucial
step in promoting public health preparedness and resilience in the face of future challenges.

In view of the foregoing, the passage of this bill is earnestly sought.

JAL NEDI
RepresenYative
Lone District, Muntinlupa City


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

TWENTIETH CONGRESS
First Regular Session

5
HOUSE BILL NO.243

Introduced by Rep. Jaime R. Fresnedi

AN ACT

EXEMPTING CRITICAL MEDICAL PRODUCTS, ESSENTIAL GOODS, INPUTS, RAW
MATERIALS, AND EQUIPMENT FROM TAXES, DUTIES, AND OTHER FEES DURING
PUBLIC HEALTH EMERGENCIES

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

SECTION |. - Short Title. - This Act shall be referred to as the "Public Health Emergency Tax
Exemption Act.”

SEC. 2. Declaration of Policy. - It 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 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;

©. Equipment for waste management refers to 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.

€. Private firms 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.

f. Public Health Emergency refers to the occurrence or imminent risk of an illness or health
condition that:

(1) Is caused by any of the following:

() Bioterrorism
(ii) Appearance of a novel or previously controlled or eradicated infectious agent

or biological toxin;

Gi

(iv) Achemical attack or accidental release;

A natural disaster;

(v)  Anuclear attack or accident; or
(vi) Anattack or accidental release of radioactive materials; and

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

(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. Exemption 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 critical medical products, essential


‘goods, equipment for waste management, inputs, raw materials, and other equipment eligible for such
exemption,

SEC. 5, 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: Providedt, 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. 6. Exemption from Donor 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. 7. 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 cause or 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 Secretary of Finance, upon the recommendation
of the Secretary of Trade and Industry and Secretary of Health, may make such exemptions conditional
upon meeting certain quota on volume of output for supplying domestic needs.

SEC. 8. Tax Deduction. ~ The Secretary of Finance, upon the recommendation of the Secretary
of Health or the Secretary of Trad 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. 9. 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. 10. Implementing Rules and Regulations, Within thirty (30) days from effectivity of this,
Act, the Department of Finance shall, in consultation with the DOH and the DTI, issue the implementing
rules and regulations of this Act.

SEC. 11, 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. 12. 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.

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SEC. 13. 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,