Senator Juan Edgardo “Sonny” Angara said donated vaccines and other critical medical supplies needed to contain and mitigate novel coronavirus disease (COVID-19) should be exempted from donor’s tax.
In filing Senate Bill No. 2046, Angara said donations of these life-saving drugs, medical supplies and equipment needed for its administration, delivery and storage should no longer be taxed, especially since the supply of COVID-19 vaccines are becoming widely available for purchase by the government and the private sector.
“The national government, local government units (LGUs) and the private sector are all in the thick of preparations for the arrival of the first doses of the COVID-19 vaccines,” said Angara, who chairs the Senate finance committee.
“Many of these vaccines will be made available to the public through the generosity of donors. We want to encourage more of these donations by exempting these from the donor’s tax,” he added.
Angara pointed out similar incentives were already granted during the implementation of Bayanihan to Heal as One Act (Bayanihan 1) and Bayanihan to Recover as One Act (Bayanihan 2) in recognition of the need to increase the supplies of goods needed by the country’s frontliners.
“Sa pamamagitan nitong panukalang pag-exempt sa donor’s tax ay masisiguro natin ang walang hadlang na pamamahagi ng mga donasyon ng bakuna at iba pang kagamitan para sa ating gobyerno pati na din sa pribadong sektor, (Through this proposed law exempting these products from donor’s tax, we can make sure there are no hindrances in the distribution of these vaccines and other supplies to our government and likewise, to the private sector),” the senator said.
Under the bill, donations of drugs, vaccines and medical supplies specifically prescribed and directly used for the treatment of COVID-19 will be exempted from the donor’s tax.
Also exempted from donor’s tax are donations of capital equipment, spare parts and raw materials needed for the production of personal protective equipment components such as coveralls, gowns, surgical masks, goggles and face shields.
Donations of drugs for the treatment of COVID-19 that are approved by the Food and Drug Administration (FDA) for use in clinical trials—including raw materials needed for the production of these drugs—would also be exempted.
The measure also exempts donations of equipment for waste management, including waste segregation, storage, collection, sorting, treatment and disposal services. Under the proposed law, the grant of donor’s tax exemptions would be in effect from January 1, 2021 to December 31, 2023; all of the covered donations must only be for use of government and private entities, not for commercial use and shall only be for free distribution to or use for the containment or mitigation of COVID-19.