VAT exemption for COVID vaccines sought
The chairman of the House Committee on Ways and Means has called on the government to exempt COVID-19 vaccines from Value-Added Tax and import duties.
After pushing strongly for a number of tax measures aimed at increasing government income, Albay Rep. Joey Sarte Salceda now wants COVID-19 vaccine importation freed from any tax loads, saying that these “are friction costs and administrative burdens that could delay vaccine procurement and distribution.”
He said the government must start stockpiling syringes and address swiftly the need for cold storage facilities and other immunization requisites.
Salceda, vice chairman of the House Committee on Appropriations, said the private sector should be given enough leeway to help the government immediately and effectively address the COVID-19 problem.
“On the question of whether the private sector should be able to import the COVID-19 vaccines without taxes and duties, my answer is an unambiguous yes,” he said.
Salceda added: “Each day that we are unable to return to the ‘old normal’ costs the economy P85 billion at least. The benefit of removing the tariff and tax barriers to importing COVID-19 vaccines is critical to fast-tracking mass vaccination by several days.”
According to the veteran administration congressman, “a cost benefit analysis he conducted indicated “very clearly on the side of frictionless importation.”
“Every day will be lifesaving,” Salceda stressed.
At the same time, Salceda called for the immediate passage of the Corporate Recovery and Tax Incentives for Enterprises or the CREATE Act. The bill contains a provision for VAT exemption for COVID-19 vaccines and drugs.
“Of course, that has to be subject to some limits of time, but generally, the government should not try to collect on drugs and vaccines for this health emergency,” Salceda said.
He added that the Customs Modernization and Tariff Act (CMTA) allows the President to suspend duties for COVID-19 vaccines.
“Under Chapter 2, Section 1608 of the CMTA, or the ‘Flexible Clause,’ President Duterte can suspend the tariffs on COVID-19 vaccines, upon the recommendation of the NEDA. We can also legislate this. I am in constant communication with the economic managers, so, once the first shipments are ready, we can easily recommend the suspension of duties,” he said.
Salceda also said that the government should plan and prepare contingencies for stockpiling syringes, needles, and other mass vaccination needs.
“As you know, the world is in some sort of vaccination rush, so one can expect shortages of syringes, needles, and other vaccination needs. We are looking at four to seven billion doses of COVID-19 vaccines being administered in 2021 and 2022. We need to have contingencies. Congress is ready to appropriate the necessary funding, but we need a good plan from the executive,” Salceda said.