In the latest development provided by the implementation of the Tax Reform for Acceleration and Inclusion (TRAIN) Law, over 100 brands of maintenance medication are now exempted from paying value-added tax (VAT).
The Department of Finance (DOF) gave a statement of Sunday saying that over 100 medicines for the treatment and prevention of diabetes, hypertension, and high cholesterol, are now VAT-free. This applies to the generic names of the medication as well as brand names. Many commonly prescribed drugs for these diseases will benefit from this tax break, such at Metformin for diabetes, Amlodipine for hypertension, and Simvastatin for high cholesterol.
“The government is committed to ensuring that Filipinos, especially the most vulnerable, reap the benefits of the TRAIN Law,” said Finance Secretary Carlos Dominguez III.
According to the DOF, the complete list of medication shall be released by the Bureau of Internal Revenue (BIR) through a revenue memorandum circular (RMC). The list is also to be posted on the BIR website.
According to RR No. 25-2018, the sale of drugs not included in the FDA list, “List of VAT-exempt Diabetes, High-Cholesterol and Hypertension Drugs”, shall be subject to VAT.
The guidelines for VAT exemption on maintenance medicines for these diseases were issued under a December 21, 2018 Joint Administrative Order (JAO) of the DOF and the Department of Health (DOH).
TRAIn was signed into law by President Duterte in December 2017. Starting January 2018, it expanded the VAT base and reduced personal income taxes (PIT).
“The goal of the CTRP (comprehensive tax reform program) is for the government to provide comprehensive socioeconomic development, and ensuring that we have healthier Filipinos is a key part of that objective,” said Secretary Dominguez.