Senior citizens asked to give up VAT discounts

Senior citizens asked to give up VAT discounts

The Expanded Senior Citizens Act of 2010 waives the value-added tax (VAT) for various goods and services such as healthcare, transportation, and restaurants

- Finance Secretary Carlos Dominguez said that the government  could revoke the discounts granted to the elderly

- However, the government assures that exemptions on basic necessities like food would still be kept

Finance Secretary Carlos Dominguez said that the government is currently reviewing exemptions given to senior citizens and could remove the discounts enjoyed by people 60 years old and above.

Senior citizens asked to give up VAT discounts

(Photo from Reel Time, GMA News TV)

However, the government were also swift to guarantee that basic necessities like food, medicine, and education would still be tax-exempt.

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The Expanded Senior Citizens Act of 2010 waives the value-added tax (VAT) for various goods and services such as healthcare, transportation, restaurants, hotels, cinemas, and many more.

However, Finance Secretary Dominguez expressed concern that the law benefits the wealthy more than the disadvantaged.

For example, a senior citizen may avail of a P1,200 discount when he or she spends P10,000 in a restaurant or a hotel.

Unfortunately, an underprivileged, senior citizen would not be able to afford a restaurant that would cost P10,000. He or she would most likely spend only P1,000 in the market and avail of a P120 discount.

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Therefore, Dominguez argues that the disparity is huge and the wealthy benefits more from the discount.

"If we truly want to help the senior citizens, the indigents, the disabled, VAT exemptions are not the right tool. We should instead give them direct subsidies like [conditional cash transfers] so we actually reach them," Dominguez said.

While it is still uncertain as to which VAT exemptions would be removed, Dominguez promised to retain exemptions on education, food, and healthcare.

The Finance Secretary further asked that the senior citizens understand the government’s decision, claiming that their “small sacrifice” would be invested in important things like agriculture, infrastructure, and social services.

"We want to thank all the senior citizens for their contributions in the past... But we are asking a small sacrifice, a little small sacrifice for building more of our country," he said.

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Reactions were mixed.

For Marina Mejia, the senior citizen admitted that she only uses discounts on food and medicine. Therefore, she didn’t need discounts on things like restaurants or the theatre.

"Halimbawa pupunta sila sa Boracay, hindi naman nakakapunta dun ang karamihan ng senior sa Boracay kung wala kang pang-airplane diba? Kaya pwede naman na siguro tanggalin ang gano'n kung sa luxury," Mejia said.

(Most senior citizens cannot afford to go to Boracay because they can’t afford the airplane ticket right? Maybe it would be better if the government removed the discounts just for luxuries.)

Senior citizens asked to give up VAT discounts

(From cnnphilippines)

Yet for some, like Ching Arce, they believe that the elderly deserve all the benefits that they could receive from the government.

"Matagal na kaming nagtrabaho. Nagbigay kami ng tax within that period na 60 years. Ngayon dapat i-enjoy na namin" Arce said.

(We have been working for a long time. We paid taxes for a period of 60 years. Therefore, we should be allowed to enjoy.)

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Nevertheless, the government assures that basic necessities would retain exemptions. ­ - Kami Media

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