RMC 108-2025: Updated VAT-Exempt Medicines for Broader Healthcare Access

The Bureau of Internal Revenue (BIR) issued Revenue Memorandum Circular (RMC) No. 108-2025 to publish the full text of a letter from the Food and Drug Administration (FDA) dated 16 October 2025. This letter endorses the updated list of value-added tax (VAT)-exempt drugs under Republic Act (RA) No. 10963 (TRAIN Law) and RA No. 11534 (CREATE Act). The revision aims to ensure that essential medicines remain accessible and affordable for patients by exempting them from VAT.

Prior to RMC No. 108-2025, the BIR released several circulars to implement and update the VAT exemption on medicines:

• RMC No. 81-2021 introduced the initial list of VAT-exempt drugs for illnesses such as cancer, diabetes, hypertension, mental illness, tuberculosis, and kidney disease;
• RMC No. 119-2022 expanded coverage for cancer and diabetes treatments;
• RMC No. 42-2023 added drugs for mental illness and kidney disease; and,
• RMC No. 93-2024 included high cholesterol medications for the first time.

These amendments reflect the government’s commitment to broaden access to life-saving and maintenance medicines.

RMC No. 108-2025 significantly increases the number of VAT-exempt drugs across major illness categories. The updated list now includes:

• Cancer: 675 drugs;
• Hypertension: 542 drugs;
• Diabetes: 323 drugs;
• Mental Illness: 300 drugs;
• High Cholesterol: 173 drugs;
• Kidney Disease: 154 drugs; and,
• Tuberculosis: 75 drugs.

The full list can be accessed on the FDA website. This expansion underscores the continuing effort to align tax policy with public health priorities, helping to reduce the financial burden on patients and promote equitable access to healthcare.

Please be guided accordingly.

Source:

P&A Grant Thornton 

Certified Public Accountants 

P&A Grant Thornton is the Philippine member firm of Grant Thornton International Ltd. 

As published on SunStar Cebu, on 07 January 2026