FDA Recommends VAT Exemption for 59 Medicines, Including Cancer Treatments
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The Bureau of Internal Revenue (BIR) has announced that a total of 59 medicines, including those used for treating cancer and other ailments requiring “maintenance” drugs, will now be exempt from the 12-percent value-added tax (VAT). This recommendation was made by the Food and Drug Administration (FDA) and detailed in a letter to the BIR, dated May 22.
The list of VAT-exempt medications, as identified by the FDA, covers a range of medical conditions, including cancer (19 medicines), diabetes (10 medicines), high cholesterol (two medicines), hypertension (six medicines), kidney disease (11 medicines), mental illness (four medicines), and tuberculosis (one medicine).
This latest batch of 59 medicines updates the list of products exempt from VAT under Republic Act No. 10963, commonly known as the Tax Reform for Acceleration and Inclusion (TRAIN) Law, and Republic Act No. 11534, known as the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Law.
Revenue Commissioner Romeo Lumagui Jr. expressed his satisfaction with the new additions, stating that they would be a welcome relief for many Filipinos. The BIR, under his leadership, has been proactive in taking steps and issuing circulars to alleviate the financial burden on the people.
According to Revenue Memorandum Circular (RMC) No. 72-2023, dated June 20, the VAT-exemption will take effect on the date when the FDA publishes the updated list of exempted medicines.
However, it’s important to note that the FDA has also removed one medicine, the cancer drug with the generic name Ixekizumab, from the list.
The decision to rescind the VAT-exemption for this medicine was based on the evaluation of its certificate of product registration and package insert, which revealed that it is specifically approved for the treatment of moderate to severe plaque psoriasis in adults who are candidates for systemic therapy.
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