However, the flipside to this famous adage would be the fact that, generally, by age 40, one will also begin to experience health-related conditions associated with reaching this particular age, the most common of which are diabetes, high-cholesterol and hypertension.

And what is immediately noticeable is the prohibitive costs of the maintenance medicine and drugs for the treatment of these maladies. As an example, diuretics, sometimes called “water pills,” are the traditional medications for high blood pressure and are often manufactured by big-name pharmaceutical brands. These hypertension drugs are usually heavily marketed, which accounts for the exorbitant prices which are ultimately borne by the ordinary consumer. The same can be said for drugs for the treatment of diabetes and high-cholesterol.

Under Republic Act (RA) 10963, or the “Tax Reform for Acceleration and Inclusion” (Train) Law, taxpayers taking medicine for diabetes, high-cholesterol and hypertension may have a reason to celebrate. Beginning Jan. 1, 2019, the sale of drugs and medicine prescribed for the treatment and/or prevention of diabetes, high cholesterol and hypertension is now exempt from value-added tax (VAT).

Recently, the Department of Finance issued Revenue Regulations (RR) 25-2018, implementing the Train provisions on the VAT-exemption, as well as to identify which particular drugs and medicine are entitled to the VAT-exemption.

We look into the salient provisions of RR 25-2018:

The VAT-exemption only applies to the sale by manufacturers, distributors, wholesalers and retailers of drugs and medicine prescribed for the treatment and/or prevention of diabetes, high-cholesterol and hypertension starting Jan. 1, 2019. Note that the importation of these drugs shall still be subject to VAT.

In order to identify which particular drugs are entitled to the VAT-exemption, the Food and Drug Authority is mandated to provide a “List of VAT-exempt Diabetes, High-Cholesterol and Hypertension Drugs” [List]. The List shall be posted in the Bureau of Internal Revenue (BIR) website through a Revenue Memorandum Circular issued for such purpose. Only those drugs that are included in the List shall be entitled to the VAT-exemption. Any update of the List, such as the inclusion of additional drugs, or the removal of drugs that were previously listed as VAT-exempt, shall likewise be posted in the BIR website.

The sale of any of the drugs mentioned in the List shall be evidenced by a VAT-exempt invoice, following the invoicing requirement prescribed under the Tax Code, as amended. Any person who violates any of the provisions of RR 25-2018 shall, upon conviction for each act or omission, be punished by a fine of not more than P1,000 or suffer imprisonment of not more than six (6) months, or both.

Taxpayers who have complaints on violations of any of the provisions of RR 25-2018 may send an email to the BIR, using the following address: This email address is being protected from spambots. You need JavaScript enabled to view it..

Manila Times Source

ATTY. PEACHES ARANAS

Managing Partner LMA LAW