BIR Offers Tax Incentives For Production and Imports of COVID-19 Essentials
The Bureau of Internal Revenue (BIR) allows manufacturers and importers of COVID-19 essentials to enjoy fiscal incentives during the COVID-19 pandemic.
Finance Secretary Carlos Dominguez III and Revenue Commissioner Ceasar Dulay signed the Revenue Regulation No. 28-2020 on Thursday, October 15. The regulation provides the guidelines for granting incentives on the manufacturing and importation of COVID-19 essential products.
The regulation is in line with the Bayanihan to Recover as One Act, which grants tax perks to prevent the country’s shortage of supplies. The act also ensures that the price of such products remains reasonable.
RR No. 28-2020 states that the importation of critical products, essential goods, equipment, or supplies essential for the fight against the COVID-19 pandemic is exempted from value-added tax (VAT), excise tax, and other fees.
Under RR No. 28-2020, the tax exemption applies to products and goods such as surgical equipment and supplies, personal protective equipment (PPE), laboratory equipment and reagents, medical equipment, consumables, testing kits, and other items determined by the Department of Health (DOH) and Department of Trade and Industry (DTI).
The regulation also exempts from such tax the inputs, raw materials, and equipment necessary to produce essential goods against COVID-19. Waste management equipment is included as well.
BIR stated that “For the purpose of qualifying for an exemption from import duties, taxes and other fees and ensure the supply of PPE at competitive prices, the taxpayer availing of the exemption must present a certification from the DTI that the equipment and supplies being imported are not locally available or of insufficient quality and preference.”
BIR announced that the VAT will be refunded on all qualified importations made from June 25 or upon the expiration of the Bayanihan to Heal as One Act, until September 14.
The VAT refund must be in accordance with existing refund procedures. Additionally, the items should not have been reported as tax input credit to qualify.