EIGHTEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES
First Regular Session
S E N A T E  
S. No. 
688
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-i 
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9 J'A 22 P 3 36
Introduced by Senator Aquilino “Koko” Pimentel HL
AN ACT
EXEMPTING DRUGS AND MEDICINES PRESCRIBED FOR 
MENTAL HEALTH CONDITIONS FROM VALUE-ADDED TAX, 
AMENDING FOR THE PURPOSE SECTION 109 OF THE
NATIONAL INTERNAL REVENUE CODE OF 1997, AS
AMENDED
EXPLANATORY NOTE
Recognizing that mental health and well-being is a concern of all, 
Republic Act No. 11036 or the Mental Health Act was signed into law in 
2018.
In the Philippines, one in five persons suffers from a mental health 
problem. Based on the study conducted by the World Health 
Organization (WHO), mental health remains a neglected part of global 
efforts to improve health. People with mental health conditions 
experience widespread human rights violations, discrimination and 
stigma. More than 80% of people experiencing mental health conditions, 
including individuals experiencing neurological and substance use


disorders, are without any form of quality, affordable mental health
care. 1
To sustain the treatment or prevention of mental health conditions, 
it is imperative that drugs and medicines are affordable. While the 
Mental Health Act made mental health services accessible, and 
integrated mental health care in the basic health services, the law does 
not cover the cost of drugs and medicines. To bring down the cost of 
drugs and medicines prescribed for mental health conditions, this bill 
proposes to exempt them from the imposition of value-added tax.
In view of the foregoing, immediate approval of this bill is 
earnestly requested.
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AQUILINO ‘‘KOKO” PIMENTEL III
'httpsy/apps-who-int/iris/bitstream/handle/l 0665/310981AVHO-MSD-19.1 -eng.pdf?ua= 1. last 
accessed on 02 July 2019


EIGHTEENTH CONGRESS OF THE 
) 
REPUBLIC OF THE PHILIPPINES 
)
First Regular Session 
)
S E N A T E
S. No.
688
11II 22 P3'-36
Introduced by Senator Aquilino “Koko” JPimentcl III
AN ACT EXEMPTING DRUGS AND MEDICINES 
PRESCRIBED FOR MENTAL HEALTH CONDITIONS FROM 
VALUE-ADDED TAX, AMENDING FOR THE PURPOSE 
SECTION 109 OF THE NATIONAL INTERNAL REVENUE 
CODE OF 1997, AS AMENDED
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Be it enacted by the Senate and House of Representatives of the Philippines in 
Congress assembled:
SECTION 1. Section 109 of the National Internal Revenue Code 
of1997, as amended, is further amended to read as follows:
"SEC. 109. Exempt Transactions. —
(1) Subject to the provisions of Subsection (2) hereof, the 
following transactions shall be exempt from the value-added tax:
X X X X X
(AA) Sale of drugs and medicines prescribed for diabetes, high 
cholesterol, and hypertension beginning January 1, 2019; AND
THOSE 
PRESCRIBED 
FOR 
MENTAL 
HEALTH 
CONDITIONS BEGINNING JANUARY 1, 2020; and
(BB) Sale or lease of goods or properties or the perfonnance of 
services other than the transactions mentioned in the preceding


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paragraphs, the gross annual sales and/or receipts do not exceed 
the amount of Three million pesos (P3,000,000);
X X X X X.
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SEC. 2. Implementing Rules and Regulations. — Within thirty (30) 
days from the effectivity of this Act, the Secretary of Finance shall, upon 
the recommendation of the Commissioner of Internal Revenue, 
promulgate the rules and regulations necessary for its effective 
implementation.
SEC. 3. Repealing Clause. — All laws, rules and regulations, or 
parts thereof that are inconsistent with this Act are hereby repealed, 
amended, or modified accordingly.
SEC. 4. Effectivity Clause. — This Act shall take effect fifteen (15) 
days after its publication in two (2) newspapers of general circulation.
Approved,