Rules on tax exempt goods released

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    The Department of Finance (DOF) has approved the implementing rules and regulations on the tax- and duty-free importation of medical supplies critical in the coronavirus disease 2019 response, as well as of school equipment needed for the online learning system amid the ongoing health crisis.

    The DOF said in a statement yesterday 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. The tax exemptions will be effective until Dec.19, 2020.

    Other 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 and vocational institutions under the Technical Education and Skills Development Authority.

    The CAO 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, regulatory clearances from agencies like Food and Drug Administration (FDA), the departments of Environment and Natural Resources and of Health need to be obtained to avail of the exemption.

    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 from the Revenue Office of the DOF.