Finance Secretary Carlos Dominguez III has green-lighted the implementing rules and regulations (IRR) issued by the Bureau of Customs (BOC) on the tax and duty-free importation of goods critical to the government’s efforts to boost the country’s healthcare capacity against COVID-19 and facilitate the government’s “blended” or online learning system amid this global health crisis.
Customs Administrative Order (CAO) No. 12-2020 establishes the compliance system for importers and manufacturers entitled to exemption from import taxes, duties and fees as set under Republic Act (RA) No. 11494 or the Bayanihan to Recover as One Act (Bayanihan 2)
The CAO details the products, equipment and supplies covered by tax exemption under Bayanihan 2. On top of medical supplies, the tax-exempt goods now include personal computers, laptops, tablets, or similar equipment appropriate for use in schools, donated for distribution to public schools, including state universities and colleges (SUCs) and vocational institutions under the Technical Education and Skills Development Authority (TESDA).
The tax exemptions will be effective until December 19, 2020.
The CAO further specifies the operational procedures and regulatory clearances from various government agencies that importers or manufacturers need to comply with to avail of the tax breaks.
Depending on the type of imported goods, the regulatory clearances that need to be obtained to avail of the exemption may come from the Food and Drug Administration (FDA), Departments of Environment and Natural Resources (DENR) of Health (DOH), and other concerned agencies.
On the other hand, imported health products for donation, certified by a regulatory agency or its accredited third party in the originating countries with established regulation, “shall automatically be cleared. The certification shall not be required for health products which are not subject to clearance from FDA,” the CAO states.
The CAO likewise provides for the retroactive effectivity of the grant of tax exemptions on eligible imports beginning June 25, 2020, or when RA 11469 or the Bayanihan To Heal as One Act (Bayanihan 1) expired. For covered goods which arrived and were cleared by the BOC beginning June 25, the CAO allows for a refund of the taxes and duties paid, provided that the importer secures a Tax Exemption Indorsement (TEI) from the Revenue Office of the Department of Finance (DOF-RO). The amount of refund shall be limited to the actual duties and taxes received by the BOC.
Finally, to ensure the speedy release of the medical supplies and equipment covered by the order, including foreign donations to a national government agency, the CAO states that the Joint Memorandum Order (JMO) on Relief Consignment and Customs Memorandum Order (CMO) No. 07-2020 on the Interim Procedure on the Provisional Goods Declaration (PGD) and its related issuances shall apply.
A PGD is a form of declaration allowing the tentative release of shipments when the declarant does not have all the information or supporting documents to complete the goods declaration, provided that the requirements shall be submitted within the period prescribed by law.
Shipments entitled to exemption may be released under PGD, subject to the submission of a TEI from the DOF-RO within the period prescribed under the rules for PGD.