BIR: Senior citizen discount burden to be shared among drugstores, pharmas, supermarkets

The Bureau of Internal Revenue has released new rules to make it fairer for drugstores, supermarkets, and pharmaceutical companies when they give discounts to senior citizens.

The law entitles senior citizens to a 20% discount on medicines and other essential goods.

“Subsequent implementation developments—especially in the pharmaceutical sector—revealed the need to clarify and institutionalize mechanisms for sharing the financial burden of the mandated discount among retailers, manufacturers, distributors, and other entities in the supply chain,” the BIR said in its Revenue Regulations No. 007-2026.

For a long time, the financial burden of shouldering the senior citizen discount usually fell heavily on the final store or retailer making the sale.

With the new regulation, the BIR is making sure that the cost of the discount is shared properly among everyone involved in getting the medicine to the shelves—including the manufacturers, distributors, wholesalers, and retailers.

“If the burden of the discount is shared between or among retailers, manufacturers or distributors, wholesalers-retailers, and wholesalers pursuant to a burden-sharing agreement, the total deductible expense from gross income shall not exceed the portion corresponding to the claimant’s share under said agreement,” the BIR regulation read.

“Retailers, manufacturers/distributors, wholesalers-retailers, and wholesalers may enter into an agreement on the sharing of the burden of the senior citizen discount. In accordance with the guidelines and mechanisms prescribed by the DOH (Department of Health), such agreement shall be duly documented, and a copy thereof shall be furnished to the DOH,” the regulation read. —KG, GMA News