Savings from VAT-free meds will be ‘wiped out’ by oil excise tax hike — Bayan Muna

/ 03:02 PM December 31, 2018

MANILA, Philippines —  The supposed savings to be gained from the Tax Reform Acceleration and Inclusion (TRAIN) law’s exemption from value added tax (VAT) of medicines for diabetes, hypertension, and high cholesterol could be “easily wiped out” by the second round of additional excise taxes on oil and petroleum products this January.

Bayan Muna chairman Neri Colmenares and Bayan Muna Rep. Carlos Isagani Zarate made the warning on Monday.


“Just like how last year’s cuts in personal income taxes were wiped out by higher prices due to increased taxes on oil, sugary drinks, and other goods and services, so too might the benefit of the tax cut on maintenance meds be made insignificant by the next round of excise tax hikes on oil and petroleum products,” Colmenares said in a statement.

Colmenares then urged the Department of Finance (DOF) to continue with their earlier plan to suspend the second round of oil tax hikes scheduled for 2019.

The DOF has announced that starting January 1, 2019, Filipinos suffering from diabetes, high cholesterol and hypertension would be able to buy cheaper medicines due to a provision of the tax reform law.

READ: VAT-free diabetes, hypertension meds starting 2019 — DOF

Zarate meanwhile said “the Duterte administration is again gambling with the prices of goods with their continued implementation of the TRAIN law and it would definitely hit consumers hard with price shocks,”

“When oil prices in the international market begin to increase due to heightened demand and reduced production then oil prices in the country would again jack up. Let me also remind the administration that this would hit during the election period and voters would also hit back by junking the administration bets,” he added.

The two are petitioners in the pending case before the Supreme Court questioning the legality and constitutionality of the TRAIN law.

Malacañang earlier greenlighted the implementation of the second tranche of oil excise tax hike in January amid decreasing international crude prices.

READ: Palace OKs implementation of 2nd fuel tax hike


An excise tax of P2.50 a liter was imposed on diesel and bunker fuel starting this year due to the TRAIN Act. This would go up to P4.50 in 2019, and P6 in 2020. The excise tax on gasoline also increased to P7 in 2018, and then to P9 in 2019 and P10 in 2020.  /muf

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TAGS: Bayan Muna, Medicines, news, oil excise tax hike, VAT
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