MANILA, Philippines — The Food and Drug Administration (FDA) is partnering with the Bureau of Internal Revenue (BIR) to reduce the prices of essential medicines for senior citizens by exempting them from Value Added Tax (VAT).
FDA Director General Samuel Zacate announced this collaboration during a news forum in Quezon City on Saturday, with the aim of making essential medicines more affordable for seniors.
Zacate explained that certain essential medicines will be exempt from VAT under the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Law, also known as Republic Act (RA) No. 11534.
“Basically, the exemption for VAT is through a law – iyong CREATE Law. So, those medicines have been declared by the FDA, endorsed to the BIR para matanggal or mawala iyong kanilang VAT," Zacata said on Saturday.
(Basically, the exemption for VAT is through a law – the CREATE Law. So, those medicines have been declared by the FDA, endorsed to the BIR so the VAT will be removed.)
The medicines include those used for conditions like hypertension, cancer, mental illnesses, tuberculosis, kidney diseases, diabetes, high cholesterol and even COVID-19 treatments.
According to Zacate, the FDA will identify the medicines eligible for VAT exemption and send the list to the BIR for implementation.
"Basically...we only endorse it to the BIR kasi kami po iyong nagdi-determine kung ano, para saan talaga iyong gamot. So, FDA ang magsasabi, kung papaano iyong mekanismo, kung paano tatanggalin iyong gamot. So, it’s a joint process po of the FDA and the BIR," the FDA official said.
(Basically, we only endorse it to the BIR because we are responsible for determining which medicines serve specific purposes. The FDA oversees the mechanisms and decides which medicines qualify. So, it's a joint process between the FDA and the BIR.)
The initiative aligns with President Ferdinand "Bongbong" Marcos Jr.'s mandate to grant a 20% discount and VAT exemption for senior citizens as stipulated in RA 9994, also known as the Expanded Senior Citizens Act of 2010.