Senator Pia S. Cayetano today said that COVID-19 vaccines could have already been exempted from the value added tax (VAT), had the House adopted the Senate’s version of the Corporate Recovery and Tax Incentives for Enterprises (CREATE) bill before the session ended this year.
This was Cayetano’s reaction to the recent call by House Ways and Means Chair Rep. Joey Salceda for the government to make the vaccines tax-free.
“I agree with the call of my House counterpart to exempt COVID-19 vaccines from tax. In fact, VAT exemption is already provided in the CREATE bill, which the Senate passed on third and final reading last November 26,” noted the Senate Ways and Means Committee chair.
“This could have already been a law now if only the House of Representatives saw the merit in adopting our version before the session ended this year” she lamented.
Cayetano further noted that the senators wanted a comprehensive list of exemptions to cover not just the vaccines, but also all drugs, devices, raw materials, and capital equipment needed to help the government’s response to contain the pandemic.
She said that Sec. 11 of the CREATE Bill (Senate Bill No. 1357) provides VAT exemption for the sale and importation of the following beginning January 1, 2021 to December 31, 2023:
-Capital equipment, its spare parts and raw materials, necessary for the production of personnel protective equipment for COVID-19 prevention;
-All drugs, vaccines and medical devices specifically prescribed and directly used for the treatment of COVID-19; and
-Drugs for the treatment of COVID-19 approved by the Food and Drug Administration (FDA) for use in clinical trials, including raw materials directly necessary for the production of such drugs.
It should be recalled that Cayetano made a manifestation on the last day of session for this year (December 16) to caution about the consequences of the non-passage of the CREATE bill by Congress this year, which would have mandated the immediate lowering of the corporate income tax from 30% to 25% for all businesses, and 20% for qualified micro, small, and medium enterprises effective July 2020. #