Senate approves measure exempting senior citizens from VAT

The Philippine Senate has taken another step towards enacting a law that will exempt senior citizens from the 12 percent value added tax (VAT). On Tuesday, the chamber on its third reading approved the proposed measure entitled “Expanded Senior Citizens Act." Once it becomes a law, senior citizens will be able to “fully avail of the 20 percent senior citizens discount that was originally envisioned for them under the Senior Citizens Act (Republic Act 7342)," said Senator Pilar Juliana Cayetano, the principal sponsor and author of Senate Bill 3561. The Senate approval has prompted her to express confidence that the chamber and House of Representatives will be able to iron out the bill’s bicameral version, making it ready for the President’s signature before the session adjourns on February 5. The Senate has nominated Senators Edgardo Angara and Loren Legarda, along with Cayetano, to the bicameral conference committee that will reconcile the House and Senate versions of the measure. Earlier, the House of Representatives passed House Bill 6390 – its version of the VAT exemption measure – with Representatives Reynaldo Uy and Eduardo Zialcita as principal sponsor and author, respectively. "This is good news for our senior citizens who have been clamoring for the passage of this measure," said Cayetano, chairperson of the Senate Committee on Social Justice. The senior citizens’ discount has been effectively reduced to only eight percent since senior citizens were also required to pay a 12 percent VAT in their purchase of medicines, goods, and services. Besides granting VAT exemptions, the bill also mandates the Department of Health (DOH) to provide free vaccination against influenza virus pneumococcal disease for indigent senior citizen patients, and a death benefit assistance of P2,000 through the Department of Social Work and Development (DSWD). Under the proposed law, indigent senior citizens identified by the DSWD will be entitled to a monthly stipend amounting to P1,500 to augment their daily subsistence and other medical needs. The bill also mandates the establishment of a “senior citizens ward" in every government hospital and the coverage of indigent senior citizens by the National Health Insurance Program or Philhealth. The measure likewise calls on local government units to prioritize senior citizens for assistance in case of economic shocks, disasters and calamities. The original senior citizens’ act – Republic Act 7432 – was passed in 1992. In 2005, the Expanded Value Added Tax law was enacted. Besides increasing the consumption tax to 12 percent from ten, the law also lifted exemptions on power and fuel. - GMANews.TV