MANILA – A party-list lawmaker on Tuesday said the newly-signed Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act would provide tax exemptions on the sale or importation of various Covid-19 items, such as vaccines, drugs, medical devices, and personal protective equipment (PPE).
ACT-CIS Rep. Jocelyn Tulfo said Section 12 of Republic Act 11534 contains the pertinent tax exemptions covering three sets of Covid-19 product groups.
Tulfo said the first category covers capital equipment, spare parts, and raw materials necessary for the production of Covid-19 PPE and items; second set covers Covid-19 drugs, vaccines, and medical devices; and the third category is for all items and drugs needed for the conduct of Covid-19 clinical trials.
She said the tax-exempt status is valid and in effect for sales and imports from Jan. 1, 2021 to Dec. 31, 2023.
“Malaking tulong ito sa mga kumpanya at LGUs [local government units] na bibili ng Covid vaccines through agreement with IATF [Inter-Agency Task Force for the Management of Emerging Infectious Diseases] and Department of Health (This would be a great help for companies and LGUs buying Covid vaccines through agreement with IATF and Department of Health),” she said.
She said on top of these, tax-exempt status is also granted for drugs to treat diabetes, high cholesterol, and hypertension beginning Jan. 1, 2020, and drugs to address cancer, mental illness, tuberculosis, and kidney disease.
“All these tax-exemptions mean all EUA (emergency use authorization) Covid vaccine purchases are tax-exempt upon importation and at sale. The tax-exempt status will also apply if and when any Covid vaccines, drugs, and devices are given certificates of product registration prior to December 31, 2023 importation and sale,” she said.
Camarines Sur Rep. LRay Villafuerte, meanwhile, said the CREATE law would help keep businesses afloat, most especially the micro, small and medium enterprises (MSMEs), and allow the firms to retain their workers or even hire new ones while the country continues to grapple with the pandemic.
Villafuerte noted that the key provisions lowering the corporate income tax (CIT) rate from 30 to 20 percent for MSMEs, which account for 99 percent of local businesses, as well as the redesigned fiscal incentives system for investors have been retained in the law signed by the President, and will aid the private sector in recovering from the pandemic-induced global recession.
“The measure is estimated to incur PHP133 billion in revenue losses to the government in the first year of CREATE’s implementation. But this is no cause for concern as this will translate into the biggest stimulus ever for businesses to help them retain or expand their operations, create more jobs and assist the government in its efforts to nurse the economy back to health amid this lingering pandemic,” he said.
He said CREATE will extend a lifeline to pandemic-struck MSMEs and other businesses that expect their revenues to plunge by as much as 70 percent over the next two weeks as restrictions are tightened in Metro Manila and adjacent provinces of Bulacan, Cavite, Laguna, and Rizal to curb the surge in Covid-19 infections.
He said the PHP133-billion stimulus for businesses under CREATE will complement the recovery measures that the government is implementing under the Bayanihan 2 to assist pandemic-hit sectors. (PNA)