BIR issues implementing rules on expanded Senior Citizens Act

MANILA, Philippines – The government yesterday came out with the revenue regulations pertaining to the tax privilege provisions of the Expanded Senior Citizens Act of 2010.

The regulations, issued by the Department of Finance (DOF) through the Bureau of Internal Revenue (BIR), also included the prescription guidelines for the availment of such tax privileges.

Revenue Regulation No. 7-2010, which was published in a national broadsheet, shall take effect 15 days after its publication.

It was recommended by BIR Commissioner Kim Jacinto-Henares and signed by Finance Secretary Cesar Purisima.

According to the rules, violators will suffer penalties under the Tax Code. First time violators will be fined P50,000 to P100,000 and could face imprisonment of two to six years. Further violations will entail a fine of P100,000 to P200,000 and imprisonment of two to six years.

Those who abuse the privileges granted by the law will be punished with a fine of P50,000 to P100,000 and imprisonment of not less than six months.

One of the provisions of the law is the exemption from the value-added tax (VAT) for certain services.

“Sales of goods and services... to senior citizens shall be exempt from the value-added tax. To ensure the full entitlement of the senior citizen to the discount prescribed in the Act, the sellers are precluded from billing VAT to the senior citizen,” the regulations said.

This is apart from the 20 percent discount for medicine, professional fees of attending physicians in all private hospitals and those of health workers providing home health care services, medical and dental care services and diagnostic and laboratory fees in private hospitals, fares in public utility vehicles, in the LRT, MRT and trains of the Philippine National Railways and for air transport and shipping vessels; and fees for services of hotels and lodging establishments and restaurants and recreation centers and the five percent discount in the monthly utilization of water and electricity.

“A senior citizen who is a minimum wage earner whose taxable income during the year does not exceed his personal exemptions will be exempt from income tax,” the regulation states.

The regulation also comes with a list of requirements for such exemption. – Marvin Sy