Tax Free Importation of Medical Supplies and Equipment Act

Senate ffice of the secretary TWENTIETH CONGRESS OF THE ) REPUBLIC OF THE PHILIPPINES 26 FEB 10 P2:56 First Regular Session SENATE RECEIVED BY: 1825 S.B. No. _ Introduced by SENATOR IMEE R. MARCOS AN ACT EXEMPTING THE IMPORTATION OF MEDICAL SUPPLIES AND EQUIPMENT FROM CUSTOMS DUTY AND VALUE-ADDED TAX EXPLANATORY NOTE Article II, Section 15 of the Constitution states that the State shall protect and promote the right to health of the people and instill health consciousness among them. However, the World Health Organization refers to the Filipino Healthcare System as "fragmented." There is a history of unfair and unequal access to health services that significantly affect the poor. There have been earnest efforts to improve health service delivery in the country, however, regional and socioeconomic disparities are prominent in the availability and accessibility of resources. According to the International Trade Administration (ITA), almost 100% of the medical equipment and devices in the Philippines are imported, while local production of medical equipment is limited to prototype units, spare parts, and disposables. Government or public hospitals rely on budget allocation and donations. However, given the rising population of the Philippines, the proposed annual appropriations would not be enough to provide quality healthcare for the Filipino communities. Thus, donations from foreign governments, institutions and individuals are badly needed.

Although donations in favor of government institutions are exempt from donors' taxes, such donations are, however, subject to customs duties and value added-taxes (VAT). This discourages prospective donors from donating to public hospitals. This measure proposes to exempt the importation of medical devices and equipment from customs duties and value added taxes which are donated and imported by foreign government, entities, and citizens. Such exemption will facilitate the development and innovation in medical research, medical diagnoses, and most especially, provide a more efficient and accessible medical treatment to Filipinos. Given the abovementioned circumstances, the immediate passage of this measure is earnestly sought. Free h. Marca ¡MEE R. MARCOS

Senate Offier of the Sametarp TWENTIETH CONGRESS OF THE ) REPUBLIC OF THE PHILIPPINES 26 FEB 10 P2:56 First Regular Session SENATE RECEIVED BY: 1825 S.B. No. _ Introduced by SENATOR IMEE R. MARCOS AN ACT EXEMPTING THE IMPORTATION OF MEDICAL SUPPLIES AND EQUIPMENT FROM CUSTOMS DUTY AND VALUE-ADDED TAX Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled:

SECTION 1. Short Title. - This Act shall be known as the "Tax-Free Importation

of Medical Supplies and Equipment Act."

SEC. 2. Relief from Customs Duty and Value Added tax on the Importation of

Donated Medical Supplies and Equipment. - The importation of the following are hereby exempt from the payment of customs duty and value-added tax: (1) Any medical supply or equipment intended for medical research and medical treatment which will be donated to the Department of Health (DOH), government hospitals, or any other medical research institution; (2) Any spare parts, components, and accessories, including tools, especially designed for the maintenance, inspection, calibration, or repair of the medical supply or equipment donated to the Department of Health (DOH), government hospitals, or any other medical research institution; and (3) Any donation in relation to medicine, medical supplies or equipment from any person, government institution, corporation, international organization, or other similar entities to medical missions or disaster relief operations organized by the government or non-government organizations, accredited by the DOH.

SEC. 3. List of Supplies and Equipment. - The DOH shall provide a list of supplies

and equipment that shall be tax-exempt under this Act. Provided that, medical supplies

and equipment that are not included in the list may be submitted to DOH for evaluation and possible inclusion.

SEC. 4. Prior Approval from the Food and Drug Administration. - Pursuant to

Republic Act No. 9711, otherwise known as the "Food and Drug Administration Act of 2009," the consignee shall obtain an import permit or clearance from the Food and Drug Administration (FDA) for the imported medical supply or equipment before the customs duty and value-added tax exemption may be availed.

SEC. 5. Separability Clause. - If for any reason any part or provision of this Act

shall be deemed unconstitutional or invalid, the other sections or provisions hereof shall not be affected and shall remain in force and effect.

SEC. 6. Repealing Clause. - All provisions of existing laws, orders and regulations

contrary to or inconsistent with this Act are hereby repealed or modified accordingly.

SEC. 7. Effectivity. - This Act shall take effect fifteen (15) days after its

publication in the Official Gazette or in a newspaper of general circulation. Approved,