BIR exempts from VAT 21 medicines for cancer, diabetes, TB, others

The Bureau of Internal Revenue (BIR) has exempted from value-added tax (VAT) several medicines for cancer, diabetes, hypertension, kidney disease, mental illness, and tuberculosis.

In a statement on Wednesday, the BIR said Internal Revenue Commissioner Romeo Lumagui Jr. issued Revenue Memorandum Circular No. 17-2024 exempting 21 medicines for various diseases from VAT.

The agency said the circular was issued due to the letter from the Food and Drug Administration (FDA) of the Department of Health (DOH) that endorsed an update on the list of VAT-Exempt Products under Republic Act No. 10963 or Tax Reform for Acceleration and Inclusion (TRAIN) law and RA 11534 or the Corporate Recovery and Tax Incentives for Enterprises Act (CREATE).

"Updating the list of VAT-exempt medicines is part of Taxpayer Service. We will update taxpayers as soon as possible of exemptions given to them by existing laws," said Lumagui.

Health Secretary Ted Herbosa welcomed this development, saying that it would be beneficial for those who are suffering from illnesses. 

“I welcome that kasi nga [because] these are drugs that are needed by people who are really sick. So very important ‘yung VAT exemption because that lowers the price of medicines,” he said in an ambush interview.

With cheaper medicines, Herbosa said more sick people could be given medicines by the Health department. 

“One of the things I want to do…in the primary care is maging available ‘yung medicines and if the medicines are cheaper, mas marami akong mabibigyan with the budget that legislation gives me. So kung mag-mura ang medicines because of removal of the VAT, malaking tulong ‘yun,” he added. 

(One of the things I want to do in primary care is to make medicines more available. And if the medicines are cheaper, more people could be given such through the budget that the Congress gives me. It would be of big help if the medicines became cheaper because of the removal of VAT.)

Below is the updated list of VAT-exempt drugs and medicines under Section 109(AA) of the National Internal Revenue Code of 1997, as amended by TRAIN Law and CREATE Act:

 

"Excellent Taxpayers Service will be the focus of BIR this 2024. This includes the issuance of circulars that would ease the financial burden of Filipinos that are suffering from the said diseases," said Lumagui.

"Ito ang handog ng BIR sa Bagong Pilipinas, serbisyong mabilis at maaasahan. Ito pong 21 na gamot na tinanggalan ng VAT ay simula pa lamang ng mga serbisyong aming ibibigay ngayong 2024," he added. —Ted Cordero/KBK, GMA Integrated News