Republic of the Philippines
HOUSH OF REPRESENTATIVES
Quezon City
NINETEENTH CONGRESS
Second Regular Session
HousEBILLNo.EL24.
i-,-.,i:,7:JELLS--?P2+
1.,     r}-:„  :i;         5_i_3.S
Introduced by Representative Wilbert T. Lee
AN ACT PROVIDING VAT-EXEMPTION TO ALL MEDICINES AND DRUGS
RELATED T0 CARDIOVASCULAR DISEASES,
AMENDING SECTION 109 0F THE NATIONAL INTERNAL REVENUE CODE OF
1997
HXPLANATORY NOTH
The   1987   Constitution   provides   that   the   State   shall   adopt   an   integrated   and
comprehensive  approach  to  health  development  which  shall  endeavor  to  make  essential
goods,  health,  and  other  social  services  available  to  all  the  people  at  affordable  cost.I  In
addition,  Section  12, Article XIII  of the  1987  Constitution, that:  "[t]he  State shall establish
and maintain an effective food and drug regulatory system and undertake appropriate health
manpower   development   and   research,   responsive   to   the   country's   health   needs   and
problems".
The  World  Health  Organization  categorized  cardiovascular  diseases  (CVDs)  as  the
number one cause of death globally.2 This disease is also responsible for a third of deaths in
the  Philippines  during  2021.3  According  to  the  Philippine  Statistics  Authority  (PSA),  the
leading cause of death in the country from January to May 2023 was ischemic heart disease.
That's  18.4% of all fatalities in the country. The other top causes of death in the country are
neoplasms and cerebrovascular diseases. Likewise, deaths from hypertensive illnesses, which
were placed sixth, accounted for 5.7% of the total fatalities in the country.
People resort to medicines as treatments,  or their doctors  give them as maintenance
medications taken on a regular basis. This is clearly a financial burden for them.
Value-added  tax  (VAT)  can  be  defined  as  a consumption tax where  the  burden  or
amount of tax finally rests with the consumer.  One of the primary objectives of VAT is to
generate tax revenues from goods and services to the government. With VAT exemption on
medicine and drugs related to CVDs, we envision a cheaper, accessible and more affordable
medicine for all Filipinos as treatment or maintenance medication for their heart disease.
1 Article XII, Section  11,1987 Constitution.
2 World Health Organization (WHO), Health Topics, Cardiovascular Disease.
3 World Health Organization (WHO),  `DOH, WHO, RTSL, and WHF commit to strengthen collaboration for cardiovascular diseases
prevention', 2022 September 30.
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VAT exemption on all medicines and drugs related to CVD is responsive to the health
needs  and  problems  of Filipinos.  Data  shows  that  CVD  requires  special  attention  for  its
prevention and treatment by  VAT exemption based on a list of "all" medicines  and drugs
related to it.
In  general,  VAT  exemption  for  medicines  and  drugs  for  CVD  is  essential  for the
treatment and recovery of many of our countrymen with heart diseases. With the passage of
the bill,  we will ease the  burden of Filipinos with CVD  and their family  as they  will  have
affordable medicines.
In view of the foregoing, the approval of this bill is earnestly sought.
AGRI PARTYLIST
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Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City
NINETEENTH CONGRESS
Second Regular Session
HOUSEBILLNo.992'z
Introduced by Representative Wilbert T. Lee
AN ACT PROVIDING VAT-EXEMPTION T0 ALL MEDICINHS AND DRUGS
RELATED TO CARDI0VASCULAR DISEASES,
AMENDING SECTION 109 0F THE NATIONAL INTHRNAL REVHNUE CODE OF
1997
Be  it  enacted  by  the  Senate  and  House  Of Representatives  Of the  Philippines  in  Congress
assembled:
1                    SECTION.1.  S#or/  rj.f/e.  This  Act  shall  be  known  as  the  ''7+4r Exe"p/z.o# /or
2       Medicines Related to cardiovascular Diseases Act"
3                    SEC.  2. Dec/ar¢/I.o"  a/Po/j.cy.   It is hereby  declared to the policy  of the  State,  in
4      accordance with the constitution, that the state shall adopt an integrated and comprehensive
5       approach to health development which  shall  endeavor to  make  essential  goods,  health,  and
6       other social services available to all the people at affordable cost.
7                    The state recognizes that the VAT exemption for medicines related to cardiovascular
8       diseases  is  crucial  in making  health  services  available to  all  people  at affordable  cost.  The
9       State further recognizes that the VAT exemption establishes and maintains an effective drug
10       regulatory  system  responsive  to  the  country's  health  needs  and  problems.   It  is  hereby
11       declared  as  a  policy  of  the  State  to  provide  VAT  exemption  for  medicines  related  to
12       cardiovascular diseases to be responsive to the country's health needs and problems.
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2                    SEC. 3.  Definition -As used in this Act:
3                     ///  Cczrdz.ovczsc2j/ar Dj.seczses are a group of disorders of the heart and blood vessels.
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They include:
a)   Coronary  heart  disease  - a  disease  of the  blood  vessels  supplying  the  heart
muscle;
b)   Cerebrovascular disease -a disease of the blood vessels supplying the brain;
c)   Peripheral arterial disease -a disease of blood vessels supplying the arms and
legs;
d)   Rheumatic heart disease - damage to the heart muscle and heart valves from
rheumatic fever, caused by streptococcal bacteria;
e)   Congenital  heart  disease - birth  defects  that  affect the  normal  development
and  functioning  of the  heart caused by  malformations  of the  heart  structure
from birth; and
I)    Deep vein thrombosis and pulmonary embolism - blood clots in the leg veins,
which can dislodge and move to the heat and lungs.4
17                     SEC.  4.    Sec.109  of the National  Internal  Revenue  Code  of  1997,  as  amended,  is
18       hereby further read as follows:
L9                     "SEC.109. Exempt Transactions. -
20                     "(1)  Subject  to  the  provisions  of Subsection  (2)  hereof,  the  following  transactions
21       shall be exempt from the value-added tax:
22                      "xxx
23                     "(P) Sale of property not primarily held for sale to customers or held for lease in the
24       ordinary  course  of trade  or  business  or  real  property  utilized  for  low-cost  and  socialized
25       housing as defined by Republic Act No. 7279, otherwise known as the 'Urban Development
26       and Housing Act of 1992,' and other related laws, residential  lot valued at Two million five
27       hundred  thousand  pesos  (P2,500,000.00)  and  below,  house  and  lot,  and  other  residential
28       dwellings  valued  at  Four  million two  hundred thousand  pesos  (P4,200,000.00)  and  below:
29       provided, That begiuning January  1, 2024 and every three (3) years thereafter, the  amounts
4 WHO, Cardiovascular Diseases (CVDs),11  June 2021.
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1       herein stated shall be adjusted to present values using the consumer price Index, as published
2       by the philippine statistics Authority (PSA).
3                      "xxx
4                    "(R)   Sale,   importation,   printing   or   publication   of  books,   and   any   newspaper,
5       magazine, journal, review bulletin, or any such educational reading material covered by the
6       UNESCO  Agreement  on  the  Importation  of Education,  Scientific,  and  Cultural  Materials,
7       including  the  digital  or  electronic  format thereof:  provided,  That the  materials  enumerated
8       herein are not devoted principally to the publication of paid advertisements;
9                      "xxx
10                    "(AA) Sale of or importation of prescription drugs and medicines for:
11                     "(i) Diabetes, high cholesterol, and hypertension beginning January 1 , 2020; and
12                     "(ii)  Cancer,  mental  illness,  tuberculosis,  and  kidney  diseases  beginning  January  1,
13        2021;
14                     "Provz.c7ec7,  That the DOH shall issue a list of approved drugs and medicines for this
15       purpose within sixty (60) days from the effectivity of this Act; and
16                   "(iii) ALL  CARDI0VASCULAR DISEASES UPON IMPLEMENTATION OF
17      THIS ACT, ProtJj.did THAT THE DOH SHALL ISSUE A LIST OF ALL DRUGS AND
18      MEDICINES   DIRECTLY  RELATED   TO   THE   TREATMENT   AND   REGULAR
19      MEDICATION OF CARDIOVASCULAR DISEASES.
20                     "(BB)  Sale or importation of the  following beginning January  1,  2021  to  December
21        31,2023:
22                     "(i) Capital equipment, its spare parts and raw materials, necessary for the production
23       of personal protective equipment components such as coveralls, gown, surgical cap, surgical
24       mask, N-95  mask,  scrub suits, goggles and face shield, double or surgical gloves, dedicated
25       shoes, and shoe covers, for covID-19 prevention;
26                     "(ii) All drugs, vaccines and medical devices specifically prescribed and directly used
27      for the treatment ofcovID-19; and
28                     "(iii)   Drugs   for  the   treatment  of  COVID-19   approved   by   the   Food   and   Drug
29       Administration (FDA) for use in clinical trials, including raw materials directly necessary for
30       the  production  of such  drugs: Provz.c7ec7, That the  Department  of Trade  and  Industry  (DTI)
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1       available  or  insufficient  in  quantity,  or  not  in  accordance  with  the  quality  or  specification
2       required: Prow.c7ec7,  further,  That for item (ii), within sixty  (60) days from the effectivity  of
3       this Act, and every three (3) months thereafter, the Department of Health (DOH) shall issue a
4       list  of prescription  drugs  and  medical  devices  covered  by  this  provision: Provz.c7ec7,  finally,
5       That the exemption claimed under this subsection shall be subject to post audit by the Bureau
6      oflntemal Revenue or the Bureau of customs as may be applicable.
7                     "(CC)  Sale or lease of goods or properties or the performance of services other than
8       the transactions mentioned in the preceding paragraphs, the gross annual sales and/or receipts
9       do not exceed the amount of Three million (P3,000,000.00).
10                    SEC.   5.   Scp¢robJ./I.fy   CJ¢wsc.    Should   any   provision   of   this   Act   be   found
11       unconstitutional by a court of law, such provision shall be severed from the remainder of this
12       Act,  and  such  action  shall  not  affect the  enforceability  of the  remaining  provisions  of this
13       Act.
14                    SHC.  6. Rcpe¢/j.#g C/¢usc.  All  laws,  acts,  decrees,  executive orders,  issuances,  and
15       rules and regulations or parts thereof which are contrary to and inconsistent with this Act are
16       hereby repealed, amended, or modified accordingly.
17                    SEC. 7. Effectivity. This Act shall take effect immediately following its publication
18       in the official Gazette or at least two (2) newspapers of general circulation.
Approved,
4