Republic of the Philippines 
HOUSE OF REPRESENTATIVES 
Quezon City, Metro Manila 
NINETEENTH CONGRESS 
 Second Regular Session 
HOUSE BILL NO. _______________ 
Introduced by ANG PROBINSYANO  
Party-List Representative Alfred Delos Santos 
AN ACT EXEMPTING PRESCRIBED DRUGS AND MEDICINES FOR MENTAL 
HEALTH CONDITIONS FROM THE IMPOSITION OF VALUE-ADDED TAX 
EXPLANATORY NOTE 
The Constitution provides as a policy that the State shall protect and promote 
the right to health of the people and instill health consciousness among them.1 This 
policy covers all aspects of health vital to every Filipino’s well-being. The importance of 
mental health has received increasing recognition in recent years, and in line with the 
state policy abovementioned, Congress passed Republic Act No. 11036, otherwise 
known as “Mental Health Act” in 2018.  
To fully realize the essence of the Mental Health Act, this bill seeks to exempt 
prescribed drugs and medicines from the imposition of value-added tax (VAT). VAT is a 
tax on consumption levied on the sale, barter, exchange or lease of goods and services.2 
It is an indirect tax which is often shifted or passed on to the buyer of the goods or 
services. In cases of mental health conditions, it is the patient who will bear the burden 
of the value-added tax. This bill aims to remove this burden and makes prescribed 
mental health medicines more accessible to those who need it. After all, mental health 
conditions affect both the rich and the poor, and the poor are less capable of addressing 
this concern due to financial constraints.  
In light of these circumstances, the passage of this bill is earnestly sought. 
ALFRED C. DELOS SANTOS 
Representative, Ang Probinsyano Party-List 
1 1987 CONST., art. II, sec. 15. 
2 Bureau of Internal Revenue. Value-Added Tax. 
September 14, 2023
3:01 pm
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Republic of the Philippines 
HOUSE OF REPRESENTATIVES 
Quezon City, Metro Manila 
NINETEENTH CONGRESS  
Second Regular Session 
HOUSE BILL NO. _______________ 
Introduced by ANG PROBINSYANO  
Party-List Representative Alfred Delos Santos 
AN ACT EXEMPTING PRESCRIBED DRUGS AND MEDICINES FOR MENTAL 
HEALTH CONDITIONS FROM THE IMPOSITION OF VALUE-ADDED TAX 
Be it enacted by the Senate and House of Representatives of the Philippines in 
Congress assembled:  
SECTION 1. Short Title. – This Act shall be known as the “Mental Health Medicines 
VAT-Exemption Act”.  
SECTION 2. Declaration of Policy. – The State affirms the basic right of all 
Filipinos to mental health as well as the fundamental rights of the people who require 
mental health services. The State commits itself to promoting the well-being of people 
by ensuring that prescribed medicines used in addressing mental health concerns are 
affordable for those who need them.   
SECTION 3. Definition of Terms. – As used in this Act, the following terms shall 
mean: 
a) “Mental Health”, as defined under Republic Act No. 11036 otherwise known
as “Mental Health Act”, shall refer to a state of well-being in which the
individual realizes one’s own abilities and potentials, scopes adequately with
the normal stresses of life, displays resilience in the face of extreme life events,
works productively and fruitfully, and is able to make a positive contribution
to the community;
b) “Mental Health Condition”, as defined under Republic Act No. 11036
otherwise known as “Mental Health Act”, refers to a neurologic or psychiatric
condition characterized by the existence of a recognizable, clinically-
significant disturbance in an individual’s cognition, emotional regulation, or
behavior that reflects a genetic or acquired dysfunction in the neurological,
psychosocial, or developmental process underlying mental functioning. The
determination of neurologic and psychiatric conditions shall be based on
scientifically accepted medical nomenclature and best available scientific and
medical evidence.
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SECTION 4. VAT-Exemption of Mental Health Condition . – Section 109 of the 
National Internal Revenue Code (NIRC), as amended, is hereby amended to read as 
follows: 
 
“SEC. 109. Exempt Transactions. – 
 
(1) Subject to the provisions of the Subsection (2) here of, the 
following transactions shall be exempt from the value-added tax: 
 
x x x 
 
(CC) Sales of prescription drugs and medicines for mental 
health conditions beginning January 1, 2024. Provided, 
That the DOH shall issue a list of approved drugs and 
medicines for this purpose within sixty (60) days from the 
effectivity of this Act.” 
 
SECTION 5. Implementing Rules and Regulations. – The Secretary of Finance, 
upon the recommendation of the Commissioner of Internal Revenue and after 
consultation with concerned government agencies, shall formulate and prepare the 
necessary rules and regulations to implement the provisions of this Act. The 
implementing rules and regulations issued pursuant to this section shall take effect 
thirty (30) days after publication in a newspaper of general circulation.  
 
SECTION 6. Separability Clause. – If any provision of this Act, or part hereof, is 
held invalid or unconstitutional, the remainder of the law or provision not otherwise 
affected shall remain valid and subsisting.  
 
SECTION 7. Repealing Clause. – All provisions of laws, presidential decrees, 
letters of instruction and other presidential issuances that are incompatible or 
inconsistent with the provisions of this Act are hereby deemed amended or repealed.  
 
SECTION 8. Effectivity. – This Act shall take effect within fifteen (15) days after 
its publication in the Official Gazette or in a newspaper of general circulation.  
 
Approved,