FIFTEENTH CONGRESS OF THE REPUBLIC) 
OF THE PHILIPPINES 
) 
First Regular Session 
) 
SENATE 
Senate Bill No. 546 
INTRODUCED BY SEN. JINGGOY EJERCITO ESTRADA 
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 
purpose~, 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. 
Senator 


FIFTEENTH CONGRESS OF THE REPUBLIC) 
OF THE PHILIPPINES 
) 
" 
", 
First Regular Session 
) 
INTRODUCED BY SEN. JINGGOY EJERCITO ESTRADA 
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 
$HALL 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. Effectivity. - This Act shall take effect upon its approval. 
Approved,