In a major move to improve healthcare affordability, the Bureau of Internal Revenue (BIR) released Revenue Memorandum Circular No. 27-2026 in April 2026. This circular expands the list of value-added tax (VAT)-exempt medicines to 2,263 drugs, up significantly from previous tallies. The update, endorsed by the Food and Drug Administration (FDA) on February 6, 2026, targets essential treatments for prevalent chronic illnesses.
The exemptions build on Republic Act No. 10963 (TRAIN Law) and RA 11534 (CREATE Act), which prioritize cost relief for patients with ongoing medical needs. BIR Commissioner Charlito Mendoza announced the expansion as a key initiative supported by President Ferdinand R. Marcos Jr. and the Department of Finance. It replaces earlier lists to provide broader coverage, ensuring more drugs qualify for zero VAT.
Drugs by Medical Condition
The new roster emphasizes high-burden diseases, with detailed breakdowns as follows:
| Condition | Number of Exempt Drugs |
|---|---|
| Cancer | 702 |
| Hypertension | 535 |
| Diabetes | 327 |
| Mental Illness | 300 |
| High Cholesterol | 171 |
| Kidney Disease | 152 |
| Tuberculosis | 76 |
These categories account for the bulk of exemptions, focusing on therapies that Filipinos rely on daily.
Impact and Next Steps
Patients and advocates welcome the change, as it lowers out-of-pocket costs for critical medications like cancer and diabetes drugs. Patients and healthcare providers can verify whether a medicine is VAT-exempt through:
- BIR Website: Download RMC No. 27-2026 and its attachments at www.bir.gov.ph
- FDA Portal: Visit edpms.doh.gov.ph for categorized medicine lists
- DOH Website: Check updated therapeutic categories and drug names
- Pharmacies: Ask pharmacists to confirm VAT-exempt status before purchase advisories.
The VAT exemption on medicines is just one part of broader healthcare reform efforts. The Senate is currently considering legislation to expand VAT exemptions to cover more medical, dental, and hospital services, enhance tax benefits for senior citizens and persons with disabilities, and strengthen the Universal Health Care implementation.
0 Comments