MANILA, Philippines - The Senate ratified yesterday the bill exempting senior citizens from the 12 percent expanded value added tax on goods and services.
Sen. Pia Cayetano, principal author of Senate Bill 3561 or the Expanded Senior Citizens’ Act of 2009, said the Department of Finance reported that the total incremental VAT and income tax foregone for the full effective discount of 20 percent would be P54.4 million in the initial year of implementation of the measure.
“It will be a loss well-lost. Senior citizens will have stronger spending power with the new law,” Cayetano said.
Under Committee Report No. 777, the proposal will just need the signature of President Arroyo to become a law.
The Senate and the House of Representatives approved last week the reconciled version of the measure.
Senate Majority Leader Juan Miguel Zubiri said this would be a good Valentine gift for the elderly.
According to the senators, senior citizens have long been clamoring for VAT exemption to enable them to fully enjoy the 20 percent senior citizens discount.
Cayetano explained the discount for senior citizens had been effectively reduced to eight percent since they were also required to pay the 12 percent VAT in their purchase of medicine and services.
The VAT exemption will apply to the following: medicine and essential medical supplies, accessories and equipment; fees of attending physicians; medical, dental fees and diagnostic and laboratory fees; fares for buses, jeepneys, taxis, Asian utility vehicles, shuttle services, public railways, domestic air transport and other vessels; utilization of services in hotels, restaurants and similar establishments; admission fees in cinemas, theaters and other places of culture, leisure and amusement; and funeral and burial services for the death of senior citizens.
In addition, indigent senior citizens will be given a monthly stipend of P500 which will be subject to the periodic review of Congress in coordination with the Department of Social Work and Development (DSWD). In case of death of an indigent senior citizen, an amount of P2,000 will also be awarded to his or her nearest kin as death benefit assistance.
Senior citizens may also enjoy a five percent discount on their water and electric bills on the condition that the utilities are named under the senior citizen residing in the household, and that the consumption for electricity and water should be below 100 kilowatt-hours and 30 cubic meters per month, respectively.
The measure likewise expands the coverage of penalties for establishments that refuse to grant the mandated benefits. Violating establishments including their owners, managers and personnel may be fined a penalty of not less than P10,000 but not more than P50,000, or imprisonment of not less than a month but not more than six months.
Other authors of the bill include Senators Manuel Roxas II, Loren Legarda, Manuel Lapid, Miriam Defensor-Santiago, Edgardo Angara, Manuel Villar Jr., Antonio Trillanes IV, Ramon Revilla Jr. and Alan Peter Cayetano. – Aurea Calica