21 drugs for diabetes, hypertension, and cancer are free from VAT according to BIR.

Value added tax (VAT) is no longer applied to at least 21 medications that treat cancer, diabetes, hypertension, kidney disease, mental illness, and tuberculosis (TB), according to a Wednesday, January 31 announcement from the Bureau of Internal Revenue (BIR).

After receiving a letter from the Food and Drug Administration (FDA) of the Department of Health (DOH) endorsing an update, BIR Commissioner Romeo Lumagui, Jr. issued Memorandum Circular No. 17-2024 to reflect this change.

“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.” Commissioner Lumagui said.

The FDA approved a revision to the list of goods exempt from VAT under Republic Act No. 10963, also known as the Tax Reform for Acceleration and Inclusion (TRAIN) Law, and Republic Act No. 11534, also known as the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Law, according to the BIR.

“This is an update to the 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,” the BIR noted in its statement.

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