Cancer, diabetes drugs among VAT-free meds
The Bureau of Internal Revenue (BIR) has approved the expansion of medicines covered by the value-added tax (VAT) exemption for serious and chronic illnesses, including cancer and diabetes.
In Revenue Memorandum Circular No. 27-2026, BIR Commissioner Charlie Mendoza said the expansion follows the Food and Drug Administration’s (FDA) endorsement of the updated list on Feb. 6.
The total number of VAT-exempt medicines for chronic illnesses now stands at 2,263, up from 2,242 in the previous update in December, when the FDA added 13 additional drugs.
“This issuance forms part of the government’s continuing efforts to help ease the cost of essential medicines, especially for Filipinos managing chronic and critical illnesses,” Mendoza said in a statement.
Under the revised list, VAT-exempt cancer medicines increased to 702 from 675. Those who are battling diabetes will see 327 exempted medicines from 323, while tuberculosis treatments increased slightly to 76 from 75.
However, some categories saw reductions in the 12-percent exemption. Hypertension medicines were reduced to 535 from 542, high cholesterol drugs to 171 from 173, and kidney disease treatments to 152 from 154.
Medicines for mental illness remained unchanged at 300.
Updated list
According to the circular, the updated list supersedes previous issuances and will remain in effect until the FDA releases further revisions.
The exemption is implemented under Republic Act No. 10963 or the Tax Reform for Acceleration and Inclusion (TRAIN) Act, and RA 11534 or the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act.
The approval comes at a time when commodity prices are rising due to the energy shock triggered by the Middle East war.
Health Secretary Teodoro Herbosa last week said there would be no increase in medicine prices until June, when pharmaceutical firms are expected to adjust inventories and potentially reflect higher logistics and shipping costs.
While most medicines do not pass through the Strait of Hormuz, Herbosa noted that higher fuel and transport costs through alternative routes could still push prices upward.
The Department of Health also said it will intensify monitoring of prices for 10 key medicines covering hypertension, diabetes, cholesterol, and antibiotics to prevent possible price exploitation.
The full list of VAT-exempted medicines can be accessed via the BIR’s website: https://bir-cdn.bir.gov.ph/BIR/pdf/Annex%20A%20of%20RMC%20No.%2027-2206%20(1).pdf INQ
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