Law Summary
Exemptions from Special Excise Tax
- The tax shall not be collected on foreign exchange used for payment of costs related to importation of certain food items such as canned milk, canned beef, and vitamin concentrates.
- Supplies and equipment purchased directly by the government or its instrumentalities for exclusive use are exempt.
- Machinery, equipment, accessories, and spare parts used by industries, miners, planters, and farmers are exempt.
- Fertilizers imported by planters or farmers, either directly or through cooperatives, are excluded from the tax.
- Articles or containers, including materials for manufacturing tin containers used by the importer for preparation of local products for export, are exempt.
- Textbooks, reference books, and supplementary readers approved by the Board on Textbooks or educational institutions are exempt.
- Paper imported by publishers for exclusive use in publication is also exempt.
- Materials such as carbides, explosives, and dynamite used for mining, as well as drugs, medicines, and medical supplies listed in the Act's appendix, are exempt.
- Payments related to reinsurance, marine and aviation insurance are excluded from the tax.
- Spare parts used in repairs of Philippine-registered vessels or airplanes that are certified as essential are exempt.
- Payments for purchase price or charter fees of Philippine-registered vessels or airplanes majority-owned by Filipinos are exempt.
- Remittances for principal and interest payments on foreign loans under Philippine government obligations are exempt.
- Payments of premiums on certain life insurance policies for veterans and others issued before December 9, 1949, are exempt.
- Payments for machinery and raw materials used by new and necessary industries as determined by RA No. 35 are excluded from tax.
Effective Date
- The Act takes effect immediately upon approval.
Appendix: Drugs, Medicines, and Medical Supplies Exempted from Tax
- Includes a detailed list of pharmaceuticals such as Adrenalin, Aluminum Hydroxide preparations, Antihelmintics, Antihistaminics, Cortisone Acetate, Digitalis preparations, and many others.
- Drugs for dental and veterinary use along with hormone preparations, diagnostic reagents, and vaccines are enumerated.
- A comprehensive list of medical and hospital supplies such as bandages, surgical instruments, syringes, x-ray equipment, and sterilizers is also included.
- Chemicals for pharmaceutical manufacture and plant pest eradication, as well as raw materials for drugs, are exempted.
- Special mention of materials used for mining purposes and therapeutics like Radium.
This Act significantly regulates foreign exchange taxation while providing extensive exemptions to support government operations, essential industries, agriculture, medicine, and education.