Medical supplies, equipment get import duty, tax exemption

Imported medical supplies and equipment needed to address the outbreak of the coronavirus disease (COVID-19) in the Philippines are now tax- and duty-free under Customs Administrative Order (CAO) No. 07-2020.

The order is in keeping with Section 4(o) of the newly signed Republic Act (RA) No. 11469 or the Bayanihan to Heal as One Act. The section grants President Rodrigo Duterte emergency powers for a limited time to address the emergency health crisis, importation of needed medical equipment or supply should be exempt from import duties, taxes and fees.

Only exempt are those importations that arrived and were cleared by BOC for three months from the effectivity of RA 11469, unless extended by Congress. This is without prejudice to the privilege granted to importers under Section 121 or 800 (m) of the Customs Modernization and Tariff Act (CMTA).

The exemption covers the following:

• personal protective equipment (PPE) such as gloves, gowns, masks, goggles, face shields, surgical equipment and supplies;
• laboratory equipment and its re-agents;
• medical equipment and devices;
• support and maintenance for laboratory and medical equipment;
• surgical equipment and supplies;
• medical supplies, tool, and consumables such as alcohol, sanitizers, tissue, thermometers, hand soaps, detergents, sodium hydrochloride, cleaning materials, povidone iodine, common medicines (e.g. paracetamol tablets and suspension, hyoscine tablet and suspension, oral rehydration solution, and cetirizine tablet and suspension);
• COVID-19 testing kits; and
• others as may  be determined by the Department of Health (DOH)

Manufacturers included in the master list of the Department of Trade and Industry (DTI) and other incentive-granting bodies of the national government may avail of the tax and duty exemption for their importation of materials necessary to produce health equipment and supplies deemed as critical or needed to carry out the objective of RA 11469.

Importers of medical equipment and supplies for commercial purposes are exempt from presenting the Certificate of Product Notification (CPN) or Certificate of Product Registration (CPR) issued by the Food and Drug Administration (FDA) prior to release from BOC, provided they provide a copy of the License to Operate (LTO) and proof of application for product notification with FDA. Importers of ventilators, respirators, and their respective accessories imported for commercial purposes also only need to present a copy of their LTO.

Imported foreign donations of PPEs not for commercial purposes and foreign donations of ventilators, respirators, and their respective accessories to be used to treat COVID-19 patients will not require clearance from FDA prior to release.

Importers or companies other than medical device establishments that use facemasks to perform their jobs and strictly for company use can directly import the facemasks without any certification from FDA.

Imported health products for donation, duly certified by the regulatory agency or the accredited third party in the originating countries with established regulations, will automatically be cleared. The certification will not be required for health products which are not subject to clearance from FDA.

Other regulations issued by FDA including Circular No. 2020-09 dated March 19, 2020 will be complied with, unless inconsistent with the provisions of RA 11469.

Customs clearance procedure for importations of medical equipment and supplies for commercial purposes will be in accordance with existing rules and regulations issued by BOC. The actual value of the imported goods should be the determining factor on whether the clearance procedure is under formal or informal entry process.

Under CAO 07-2020, BOC should “not necessarily delay the release of donated medical equipment and supplies” deemed as critical to carry out the objective of RA 11469. Clearance procedure for donated medical equipment and supplies will be under the informal entry process.

The joint administrative order on relief consignments and BOC Office of the Commissioner memorandum dated March 17, 2020 on provisional goods declaration will apply in suppletory capacity for the speedy release of the medical equipment and supplies.

The shipments entitled to the exemption may be released under provisional goods declaration subject to the submission of Tax Exemption Indorsement from the Department of Finance Revenue Office after April 12, 2020 or upon lifting of the declaration of the enhanced community quarantine, whichever comes earlier.

Any person who makes or attempts to make any entry of imported goods by means of any false or fraudulent statement in order to avail of the privilege under RA 11469 will be subject to sanctions and penalties under the CMTA. – Roumina Pablo