MANILA - Prescription medicines for cancer, mental illness, tuberculosis and kidney diseases will be exempted from value added tax starting 2023 should President Rodrigo Duterte sign the new sin tax bill into law.
The Department of Health must "issue a list of approved drugs and medicines" that will be deemed VAT-free, based on a copy of the measure that was sent to Malacañang for Duterte's approval.
The so-called "sin tax" law, which will raise duties on electronic cigarettes and alcohol seeks to raise revenues for universal health care.
The exemption shaved P5.2 billion off the projected annual revenues from the measure, bringing it to P22 billion, said Sen. Pia Cayetano, the bill's sponsor and chairperson of the chamber's tax-writing committee.
Several lawmakers sought value added tax exemptions for some prescription drugs next year, but the the Department of Finance asked to delay its implementation to limit revenue losses, said Sen. Imee Marcos.
Marcos earlier filed a bill seeking VAT exemptions for all prescriptive drugs. "Wala naman talagang gustong magkasakit at mangailangan ng gamot," she said.
(No one wants to get sick and have to buy medicine.)
In 2019, medicine for diabetes, high cholesterol and hypertension were exempted from VAT under the Tax Reform for Acceleration and Inclusion (TRAIN) law.