The Bureau of Internal Revenue (BIR) has officially released its latest list of medicines that will no longer be subject to Value-Added Tax (VAT), a move expected to significantly ease the financial burden for Filipinos suffering from severe illnesses. This development comes through Revenue Memorandum Circular (RMC) No. 27-2026, issued on April 8, 2026, which declares 2,263 drugs as VAT-exempt, provided they have been previously approved and endorsed by the Food and Drug Administration (FDA) of the Department of Health (DOH).
Breakdown of VAT-Exempt Medicines by Illness
According to the agency's detailed breakdown, the largest portion of the list is dedicated to cancer patients, encompassing 702 different types of medications. This is followed by 535 drugs for hypertension, 327 for diabetes, 300 for mental illness, 171 for high cholesterol, 152 for kidney disease, and 76 for tuberculosis. This comprehensive coverage aims to address a wide range of critical health conditions affecting the population.
Legal Basis and Government Support
The implementation of this tax exemption is in strict accordance with the provisions outlined in Republic Act No. 10963, also known as the TRAIN Law, and Republic Act No. 11534, the CREATE Act. BIR Commissioner Charlito Martin R. Mendoza emphasized that this initiative is part of the government's mandate to lower medication prices across the country. The Department of Finance (DOF), under the leadership of Finance Secretary Frederick D. Go, has also expressed strong support for this measure, highlighting its alignment with broader economic and health policies.
Response to Presidential Directive
This move serves as a direct response to the directive from President Ferdinand R. Marcos Jr., who has consistently advocated for making medical services more accessible and affordable for all Filipinos. By removing VAT from these essential medicines, the government aims to reduce out-of-pocket expenses for patients and their families, thereby improving healthcare accessibility.
Replacement of Previous Circulars
The BIR has clarified under RMC No. 27-2026 that this new list will automatically replace and invalidate any previous circulars issued on the subject. This ensures uniformity and eliminates confusion regarding which medicines qualify for VAT exemption, streamlining the process for pharmacies, healthcare providers, and patients alike.
Overall, this policy is poised to have a substantial impact on public health in the Philippines, offering financial relief to thousands of individuals battling serious medical conditions and reinforcing the government's commitment to affordable healthcare.
