List of VAT-exempt medicines updated; FDA adds 59
MANILA -A total of 59 medicines, including ones for cancer and other ailments that need “maintenance” drugs, will be exempt from the 12-percent value-added tax as recommended by the Food and Drug Administration (FDA), according to the Bureau of Internal Revenue.
In a letter to the Bureau of Internal Revenue (BIR) dated May 22, the FDA identified medications for cancer (19), diabetes (10), high cholesterol (two), hypertension (six), kidney disease (11), mental illness (four), and tuberculosis (one).
This batch of 59 updates the list of VAT-exempt products under Republic Act No. 10963, or the Tax Reform for Acceleration and Inclusion or Train Law, and Republic Act No. 11534, or the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Law.
“This is a welcome addition to the list,” Revenue Commissioner Romeo Lumagui Jr. said in a statement.
Lumagui said the BIR under his watch takes steps and issue circulars “that would make the lives of Filipinos financially easier.”
Revenue Memorandum Circular (RMC) No. 72-2023, dated June 20, states that the effectivity of the VAT-exemption will be on the date when FDA publishes the updates on the list.
Also, the FDA took out from the list— therefore rescinding the VAT-exemption of—the cancer medicine with the generic name Ixekizumab.
“Upon the evaluation of the certificate of product registration and package insert of [Ixekizumab], it was noted that it is approved as … treatment of moderate to severe plaque psoriasis in adults who are candidates for systemic therapy,” the FDA told the BIR.
This means that Ixekizumab is, in fact, not a treatment for cancer. Plaque psoriasis is a condition that affects the skin, and is not life-threatening.
Further, the BIR revised or corrected the listing of metropolol, a medicine for hypertension, into “metropolol succinate.”
In a related development, the BIR reduced by half the requirements for VAT refunds as part of efforts to promote ease of doing business in the country.
For this purpose, the BIR issued RMC No. 71-2023 and Revenue Memorandum Order No. 23-2023, both effective July 1, 2023.
Both memos are intended to help streamline the documentary requirements and procedures in the filing and processing of VAT refunds.
The BIR chief said that under the latest policy, the number of documentary requirements was reduced from 30 to a minimum of nine and maximum of 17. —Ronnel W. Domingo