QUEZON CITY - The Food and Drug Administration (FDA) has announced its collaboration with the Bureau of Internal Revenue (BIR) to reduce the cost of medicines for senior citizens by removing the value-added tax (VAT).
According to Philippines News Agency, the VAT exemption for medications will be implemented under the provisions of the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act, also known as Republic Act (RA) No. 11534. Zacate explained during a news forum on Saturday that medicines identified by the FDA would be endorsed to the BIR for the removal of their VAT charges.
The CREATE law specifically provides VAT exemptions for medicines used to treat hypertension, cancer, mental illnesses, tuberculosis, kidney diseases, diabetes, high cholesterol, and includes Covid-19 related drugs and medical devices. Under this law, the FDA is responsible for identifying and listing the medicines eligible for the VAT exemption and then forwarding this information to the BIR for implementation.
Zacate detailed the collaborative process between the FDA and the BIR, emphasizing the FDA's role in determining the eligible medicines and the BIR's subsequent implementation of the tax exemptions. He described the partnership as a joint effort aimed at alleviating the financial burden of healthcare for senior citizens.
This initiative comes following an order from President Ferdinand R. Marcos Jr. last month directing the FDA to enforce a 20 percent discount and VAT exemption for senior citizens, in accordance with Republic Act 9994, also known as the Expanded Senior Citizens Act of 2010.