THE House Committee on Ways and Means on Monday approved a consolidated substitute bill exempting Covid-19 vaccines from duties and value-added tax.
Although the recently ratified proposed Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act already exempts Covid-19 from VAT and from import duties, “there is some room for interpretation on whether the duties apply to all importers, or only to registered enterprises,” Committee Chairman and Albay Rep. Joey Sarte Salceda said.
“That is especially because we were only dealing with duty incentives in that bill. So, we want to make sure vaccines can be imported duty-free and without friction at the ports. That is why we are taking these bills up,” Salceda said.
BHW Rep. Angelica Natasha Co, an author of the bill, said public health, public safety, and the economic security require that all impediments, including cost constraints, to the swift and effective implementation of the vaccination program must be cast aside.
“To make all the Covid-19 vaccines affordable and reasonably-priced, [I] propose that all the vaccines and everything needed in the fight against Covid-19 must be tax-free regardless of country of origin, manufacturer, and whether for the public vaccination program or for private inoculation by a health professional.
Tax-free means not just zero import duties and administrative fees but also zero VAT, other sales taxes, other business taxes, and local taxes,” she said.
“The national treasury, BIR [Bureau of Internal Revenue], Customs Bureau, and local governments need not gain financially from the importation and distribution of the Covid-19 vaccines because the country’s immediate gain is the further reopening of the economy and onwards to the new normal with the coronavirus still a lingering threat,” she added.
Meanwhile, Salceda said his committee will consolidate five pending bills seeking to grant tax exemptions to vaccines not only for the current Covid-19 pandemic but everytime the need arises in response to public health emergency situations.
“We will consolidate these [five] bills. Let me be clear: the number one economic priority of the country must be fast, efficient, and safe delivery of vaccines. At this point, very little else matters. That is why we are prioritizing removing these friction costs,” Salceda said.
“One day saved from the tax refund system, and one day of not having to deal with customs procedures is worth billions in economic output. As President Duterte said, when he cited a figure I calculated, we are losing some P20 billion in economic output due to delays in vaccination. So, the revenue impact of these bills matters very little to me, in view of their overwhelming economic importance,” Salceda added.
According to Salceda, the underlying economic principle that every country must bear in mind now is simple—”no vaccine, no normal life.”
Earlier last year, Salceda said that all economic policy during this pandemic must be geared towards being a bridge to a Covid-19 vaccine.
“The problem was not cyclical, unlike most crises. It was health-driven. If people are assured of their health, they will go out. That still holds now, that is why we need to pass measures that ease vaccination,” Salceda said.