Death, as is life, is a costly endeavor. In recognition of the need for a decent life and a respectable death for senior citizens, the legislature passed the Senior Citizens Act (Republic Act (RA) 7432 as amended by RA 9257) and the Expanded Senior Citizens Act of 2010 (RA 9994) to grant senior citizens a 20 percent discount on their purchases of goods and services.
You may be wondering what benefits are there upon death. Section 4 of RA 9994 provides that the benefit extends to funeral and burial services for the death of senior citizens. In the implementing rules and regulations (IRR) of RA 9257 and RA 9994 the term “funeral and burial services” was not defined. However, the IRR of RA 9994 provided a list of services in relation to the term. Specifically, the purchase of a casket or urn, embalming, cremation cost, and other related services, such as viewing or wake cost, pick-up from the hospital morgue, transport of the body to the intended burial site in the place of origin, but shall exclude obituary publication and the cost of the memorial lot. This list in the IRR was adopted by the tax authorities in Revenue Regulations (RR) 7-2010.
In providing this enumeration, doubt arose for some taxpayers if the intention of the IRR and RR was to limit the term “funeral and burial services” to the list of goods and services indicated in the IRR and RR.
This issue was tackled in a recent Supreme Court (SC) case. In this case, a domestic corporation engaged in the business of selling memorial lots and offering interment services took the position that interment services are not covered by the subject Act as there is no specific provision for interment services. In contrast, the government took the position that interment services are included under the umbrella term “funeral and burial services”, as the term is understood in its plain and ordinary meaning.
The Regional Trial Court (RTC) adopted the position that Section 6 of the IRR of RA 9994 is an exclusive list of what is covered by the discount. However, the SC overturned the RTC’s decision and echoed prior rulings that the spirit of the Senior Citizen Act, as amended, is to recognize that as a public duty, the responsibility for the care of senior citizens devolves upon the State, the family, and the community. The SC explained that the wordings of the law are not ambiguous, and the term “funeral and burial services” must be understood in its plain and ordinary meaning, and comprises the ceremony held for the deceased and the actual act of burying the remains in the ground.
The SC decision provides a welcome clarity not only to our senior citizens, but also to taxpayers providing funeral and burial services. For the latter, keeping abreast of developments and the requirements to extend any discounts and to report the same for tax purposes is critical. After all, the burden rests on the taxpayer to prove compliance with tax regulations.
Via Sacarine S. Daria is a tax analyst under the tax group of KPMG in the Philippines (R.G. Manabat & Co.), a Philippine partnership and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. The firm has been recognized as a Tier 1 in transfer pricing practice and in general corporate tax practice by the International Tax Review. For more information, you may reach out to Via Sacarine S. Daria or Mary Karen E. Quizon-Sakkam through ph-kpmgmla@kpmg.com, social media or visit www.home.kpmg/ph.
This article is for general information purposes only and should not be considered as professional advice to a specific issue or entity. The views and opinions expressed herein are those of the author and do not necessarily represent KPMG International or KPMG in the Philippines.