SENIOR CITIZEN’S ACT

As provided for in Republic Act No. 7432 (Senior Citizens Act of 1992), as amended by
Republic Act No. 9257 (Expanded Senior Citizens Act of 2003) and Republic Act No. 9994
(Expanded Senior Citizens Act of 2010), senior citizens shall be entitled to a 20% discount on
the sale of the following goods and services from all establishments, for the exclusive use and
enjoyment or availment of the senior citizen:

 on the purchase of medicines, including the purchase of influenza and pnuemococcal

vaccines, and such other essential medical supplies, accessories and equipment to be
determined by the Department of Health (DOH);
 on the professional fees of attending physician/s in all private hospitals, medical facilities,
outpatient clinics and home health care services;
 on the professional fees of licensed professional health providing home health care services
as endorsed by private hospitals or employed through home health care employment
agencies;
 on medical and dental services, diagnostic and laboratory fees in all private hospitals,
medical facilities, outpatient clinics, and home health care services, in accordance with the
rules and regulations to be issued by the DOH, in coordination with the Philippine Health
Insurance Corporation (PhilHealth);
 in actual fare for land transportation travel in public utility buses (PUBs), public utility
jeepneys (PUJs), taxis, Asian utility vehicles (AUVs), shuttle services and public railways,
including Light Rail Transit (LRT), Mass Rail Transit (MRT), and Philippine National Railways
(PNR);
 in actual transportation fare for domestic air transport services and sea shipping vessels
and the like, based on the actual fare and advanced booking;
 on the utilization of services in hotels and similar lodging establishments, restaurants and
recreation centers;
 on admission fees charged by theaters, cinema houses and concert halls, circuses, leisure
and amusement; and
 on funeral and burial services for the death of senior citizens;

20% Senior Citizen Discount as an exercise of the power of eminent domain

In CIR v. Central Luzon Drug Corporation, G.R. No. 159647, April 15, 2005, the Supreme
Court stated that the tax credit (now treated as tax deduction, see discussion below) under Section
4 of Republic Act No. 7432) granted to private establishments giving senior citizen discounts can
be deemed as their just compensation for private property taken by the State for public use. This
is a case where the power of taxation is used as an implement for the exercise of the power of
eminent domain,

20% Senior Citizen Discount as a tax deduction

The 20% Senior Citizen Discount is a tax deduction and not a tax credit. In Carlos Superdrug
Corp vs. Department of Social Welfare and Development, G.R. No. 166494, June 29,
2007, and later reiterated in M.E. Holding Corporation vs. Court of Appeals, G.R. No.
160193, March 3, 2008, the Supreme Court held that the 20% sales discount shall be treated
as a tax deduction and no longer as a tax credit.

This reverses the ruling in CIR v. Central Luzon Drug Corporation, G.R. No. 159647, April
15, 2005, where the Court held that the 20% discount required by the law to be given to senior
citizens was a tax credit and not merely a tax deduction from the gross income or gross sale of
the establishment concerned. This ruling, however, was based on Section 4 of Republic Act No.
7432, which provides establishments may claim the discount as a tax credit. In the cases of Carlos
Superdrug Corp and M.E. Holding Corporation, the Supreme Court noted that Republic Act No.
9257, which amended Republic Act No. 7432, now provides that establishments may claim the
discounts as a tax deduction. Republic Act No. 9994 retains this treatment of the 20% senior
citizen’s discount as a tax deduction.