House panel approves tax exemption on LGU purchases of COVID-19 shots
A staff member inoculates a colleague with a COVID-19 coronavirus vaccine at the Baruipur sub-divisional hospital on the outskirts of Kolkata, India on January 18, 2021.
AFP/Dibyangshu Sarkar

House panel approves tax exemption on LGU purchases of COVID-19 shots

(Philstar.com) - February 15, 2021 - 3:28pm

MANILA, Philippines — A House committee approved the tax provision of a bill allowing local government units to purchase COVID-19 vaccines directly from manufacturers.

The House Ways and Means Committee approved the tax provision of House Bill 8648 or the Emergency Vaccine Procurement Act of 2021, which seeks to authorize local governments to procure COVID-19 shots on their own without having to go through public bidding.

The measure still needs to be approved by the House in plenary.

Currently, local governments have to strike a tripartite deal with the national government and vaccine makers to secure doses of COVID-19 jabs.

“Time is of the essence. Each day of delay is very costly for the government, and leaves many of our vulnerable countrymen exposed to the dangers of this disease,” the bill’s explanatory note read.

The bill was filed by Speaker Lord Allan Velasco (Marinduque), Majority Leader Ferdinand Romualdez (Leyte) and Minority Leader Joseph Stephen Paduano (Abang Lingkod party-list).

Section 6 of the proposed measure states that the “procurement, importation, storage, transport, distribution and administration of COVID-19 vaccines by the local government units shall be exempt from customs duties, value-added tax, excise tax and other fees, provided, that the vaccines acquired shall be only used for their residents and constituents, and not for commercial distribution.”

Under the bill, LGUs can only buy COVID-19 vaccines which are registered with the country’s Food and Drug Administration or have been granted an emergency use authorization.

The bill also provides for additional exemption to regular procurement rules by authorizing provinces, cities and municipalities to make advanced payment of up to 50% to COVID-19 drug and vaccine makers if they require it, unless otherwise directed by the president.  

Foreign manufacturers that demanded advanced payment are required to supply the vaccines within six months from the perfection of the contract.

The proposed measure also aims to create an indemnification fund to cover adverse events following immunization (AEFI).

Senate Majority Leader Juan Miguel Zubiri filed a similar bill in the upper chamber.

National strategy

Rep. Joey Salceda (Albay), who chairs the committee, stressed the need for the national government to set clear guidelines on how LGUs can procure, store and administer vaccines in the most efficient manner possible

“In the proper time, I might propose amendments to the bill. In particular, there has to be some way to cluster individual LGU procurements so that we can benefit from economies of scale. That will be especially useful in storage, since we can have shared storage facilities for LGUs,” Salceda said in a statement.

“Procurement is just half the problem. Logistics is what matters once vaccines are here,” he added. — Gaea Katreena Cabico with report from Xave Gregorio

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