For Priscilla Cruz, 64, the New Year brings unexpected but welcome news: starting Jan. 1, her maintenance medication for diabetes, hypertension and high cholesterol are bound to cost much less than the almost P3,000 she shells out every month.
Though the amount is already 32 percent less than the actual cost of her daily dose—thanks to her 20-percent senior discount and 12-percent value-added tax (VAT) exemption—Cruz was glad to learn that Republic Act No. 10963 would further slice the cost of her lifeline meds.
Otherwise known as the Tax Reform for Acceleration and Inclusion (TRAIN) Act, RA 10963 provides that selected medication for diabetes, hypertension and high cholesterol will be exempt from the 12-percent VAT.
Millions to benefit
Aside from Cruz, possible beneficiaries include more than five million Filipinos, the estimated number of diagnosed diabetics in the country, according to the Diabetes Center of the Philippines.
In the 2016 data released by the Philippine Statistics Authority, diabetes and hypertensive diseases each accounted for 5.7 percent of deaths in the country, or 33,295 and 33,452 cases, respectively.
FDA list
According to Revenue Regulation 25-2018 of the Bureau of Internal Revenue (BIR), the VAT exemption will apply only “to the sale by manufacturers, distributors, wholesalers, and retailers of the drugs and medicines prescribed for the treatment and/or prevention of diabetes, high cholesterol and hypertension,” but not to their importation.
The Food and Drug Administration (FDA) was expected to come out with a “list of VAT-exempt diabetes, high-cholesterol and hypertension drugs,” which the BIR would later issue as a circular and post on its website.
Other drugs not on the FDA list will still have VAT, the revenue agency said.
“Any update, such as registration of new and/or additional drugs and medicines, as well as deregistration of those previously published by the FDA, shall likewise be posted on the BIR website,” it added.
To ensure compliance and in line with invoicing requirements, the BIR said the word “VAT-exempt” must be prominently printed on the receipt.
Violators of any provision of the regulations shall, upon conviction for each act or omission, be punished with a fine of up to P1,000, or a jail term of up to six months, or both.
E-mail for complaints
Consumers can report noncompliant businesses to ecomplaints@bir.gov.ph, the BIR said.
The Department of Health (DOH) on Friday said the VAT exemption on selected medications proves that the administration values the health of the public.
“The TRAIN law is indeed a health measure bringing more affordable medicines to our patients while raising (the) prices of sugary beverages, alcohol and cigarettes, which bring harm to the general populace,” the DOH said in a statement.
Since it was implemented in January 2018, however, the TRAIN law has been blamed for high inflation rates, which peaked nationwide at 6.7 percent in September and October, and reached 10 percent in the Bicol region.
Oil prices also surged after an excise tax was imposed on fuel despite soaring global oil prices. —WITH REPORTS FROM JOVIC YEE, DARRYL JOHN ESGUERRA, BEN O. DE VERA AND INQUIRER RESEARCH