TAXATION

WHAT IS REPUBLIC ACT (R.A.) NO. 9994?

 R.A. 9994 is the Expanded Senior Citizens Act of 2010. It amended R.A. 9257 or the
Expanded Senior Citizens Act of 2003, which also amended R.A. 7432, the original
Senior Citizens Act of 1993.

WHAT IS THE INTENT BEHIND R.A. 9994?

 R.A. 9994 is a social welfare legislation intended to benefit our Filipino elderly and
provide them additional privileges.

WHEN DID R.A. 9994 BECOME EFFECTIVE?

 R.A. 9994 became effective on April 22, 2010. It was published on March 28, 2010 in the
Philippine Daily Inquirer and April 7, 2010 in Business Mirror.

WITHIN WHAT PERIOD DID THE IMPLEMENTING RULES AND REGULATIONS

(IRR) NEED TO BE FORMULATED?

 The DSWD, in consultation with other government agencies, senior citizens NGOs and
other stakeholders, had until June 22, 2010 or 60 days from the law’s effectivity to draft
the new IRR to provide specific and operationalize the new senior citizens law.

WHEN DID THE IRR BECOME EFFECTIVE?

 The IRR became effective on July 6, 2010. The IRR was published in Business Mirror
and Remate on June 21, 2010, and in the Philippine Star on June 22, 2010.

WITHIN WHAT PERIOD SHOULD GOVERNMENT AGENCIES DRAFT THEIR OWN

SUPPLEMENTAL GUIDELINES TO AUGMENT THE IRR AND PROVIDE OTHER
NECESSARY DETAILS TO THE SENIOR CITIZENS LAW?

 Line agencies like the DOH, DILG, DOTC, DOT, DOF and their attached offices are
given thirty (30) days from the IRR’s effectivity to draft their respective supplemental
guidelines.

 However, due to the requirement of public hearings, regulatory bodies of utility providers
like the ERC, MWSS and LWUA are given six (6) months to draft their relevant
guidelines.
WHO ARE ENTITLED TO THE BENEFITS AND PRIVILEGES GRANTED UNDER
R.A. 9994?

 All Filipino residents who are 60 years old and above are entitled to the benefits and
privileges granted R.A. 9994. It may cover elderly “dual citizens” who can prove Filipino
citizenship and at least 6 months residency in the Philippines.

WHAT ARE THE BENEFITS AND PRIVILEGES GIVEN TO SENIOR CITIZENS

UNDER R.A. 9994?

 Senior citizens are entitled to the following:

1. Discount privileges,
2. Free services,
3. Exemptions,
4. Incentives,
5. Government financial assistance, and
6. Priority in express lanes.

WHAT ARE THE SENIOR CITIZENS' DISCOUNT PRIVILEGES GRANTED UNDER

R.A. 9994?

 Senior Citizens are entitled to the following:

1. 20% discount on the purchase of certain goods and services,

2. Special 5% discount on prime commodities and basic necessities,

3. 5% utility discount on electric and water consumption, and

4. 50% discount on electric, water and telephone consumption of senior citizens centers and
residential or group homes.

WHAT TRANSACTIONS BY SENIOR CITIZENS ARE COVERED BY THE 20%

DISCOUNT AND VAT-EXEMPTION?

 The 20% senior citizens discount and VAT-exemption shall apply only to the following
purchases of goods and services, when applicable:

1. The purchase of medicines, including the purchase of influenza and pneumococcal vaccines,
and such other essential medical supplies, accessories and equipment;
2. The professional fees of attending physician/s in all private hospitals, medical facilities,
outpatient clinics and home health care services;

3. The professional fees of licensed professional health workers providing home health care
services as endorsed by private hospitals or employed through home health care employment
agencies;

4. 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);

5. 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);

6. Actual transportation fare for domestic air transport services and sea shipping vessels and the
like, based on the actual fare and advanced booking;

7. The utilization of services in hotels and similar lodging establishments, restaurants and
recreation centers;

8. Admission fees charged by theaters, cinema houses and concert halls, circuses, carnivals, and
other similar places of culture, leisure and amusement; and

9. Funeral and burial services for the death of senior citizens;

HOW CAN SENIOR CITIZENS AVAIL OF THE DISCOUNT PRIVILEGES FROM

BUSINESS ESTABLISHMENTS?

 A senior citizen, or a duly authorized representative, must present an ORIGINAL AND

VALID senior citizens identification card issued by the Office of Senior Citizens Affairs
(OSCA) in the city or municipality where he/she resides, with the necessary purchase
booklet for medicines, or the purchase booklet for basic necessities/prime commodities,
when applicable.

CAN BEDRIDDEN OR INCAPACITATED SENIOR CITIZENS AVAIL OF

DISCOUNTED PURCHASES THROUGH A REPRESENTATIVE?

 Yes, but senior citizens can send their duly authorized representative to purchase their
medicines and grocery items only. However, the representative must carry the senior
 citizen’s OSCA ID, the senior citizen’s purchase booklet, a document specifically
authorizing the representative, and a doctor’s prescription when necessary.

 However, discounted food purchases cannot be by proxy or through a representative

owing to the limitation that it should be for the exclusive use and enjoyment, or “personal
consumption” of the senior citizen only.

WHAT ITEMS ARE SUBJECT TO THE SPECIAL 5% DISCOUNT PRIVILEGE?

 The special 5% discount privilege applies only to prime commodities and basic
necessities as listed under the Price Act or Republic Act No. 7581.

1. BASIC NECESSITIES such as rice, corn, bread, fresh, dried and canned fish and other
marine products, fresh pork, beef and poultry, meat, fresh eggs, fresh and processed milk, fresh
vegetables, root crops, coffee, sugar, cooking oil, salt, laundry soap, detergents;

2. PRIME COMMODITIES like fresh fruits, flour, dried, processed and canned pork, beef and
poultry, meat, dairy products not falling under basic necessities; noodles, onions, garlic; and

3. All drugs not classified as essential drugs by the DOH and other commodities that may be
classified by the DTI and the DA according to Republic Act No. 7581 or The Price Act.

ARE PURCHASES OF VITAMINS AND MINERALS SUBJECT TO THE 20%

DISCOUNT ON MEDICINES?

 Yes, vitamins and minerals specifically prescribed by an attending physician for an

elderly for the prevention, treatment or diagnosis of a disease or illness can be considered
as medicine or drug purchases subject to the 20% discount.

DOES THE 20% DISCOUNT APPLY TO FOOD SUPPLEMENTS PRESCRIBED BY AN

ATTENDING PHYSICIAN?

 No, the 20% discount on drug and medicine purchases does not extend to food or food
supplements, even if prescribed by a doctor for an elderly.

IS THE SENIOR CITIZENS DISCOUNT APPLICABLE TO PURCHASE OF GOODS

AND SERVICES PAID IN CASH ONLY?

 No, the senior citizens’ discount applies to purchases or transactions paid either in cash
and or by credit card.
CAN SENIOR CITIZENS AVAIL OF THE 20% DISCOUNT ON FOOD PURCHASES
WHETHER TAKE-OUT/TAKE-HOME, DRIVE-THRU OR BY DELIVERY?

 Yes, as long as the food purchase is for the personal consumption of the senior citizen and
he/she is able to show an OSCA-issued ID, the 20% discount must be granted.

WHAT ARE THE FREE SERVICES SENIOR CITIZENS ARE ENTITLED TO?

 Senior citizens are entitled to the following free medical benefits:

1. Medical and dental services, diagnostic and laboratory tests requested by the physician such as
but not limited to X-rays, computerized tomography scans, and blood tests availed of by senior
citizens, including professional fees of attending doctors in all government hospitals, medical
facilities, outpatient clinics, and home health care services,

2. Free pneumoccocal and influenza vaccine for indigent senior citizens.

DOES AVAILING OF THE 20% SENIOR CITIZENS DISCOUNT ON

HOSPITALIZATION OR MEDICAL SERVICES PRECLUDE UTILIZING
PHILHEALTH BENEFITS AT THE SAME TIME?

 No, a senior citizens discount on hospitalization and/or medical services can be availed of
separately. Thus, PHILHEALTH coverage can still be utilized on top of the 20% senior
citizens discount.

WHAT ARE THE UTILITY DISCOUNTS AVAILABLE TO SENIOR CITIZENS?

 There are 2 types of utility discounts that will benefit senior citizens:

1. 50% discount on electric, water and telephone consumption on senior citizens centers and
residential/group homes as a form of “institutional support”; and

2. 5% discount on electric consumption not exceeding 100 kw/hrs and water consumption not
exceeding 30 cubic meters for households with senior citizens residing therein and under whose
name the separate meters are registered.

WHAT OTHER GOVERNMENT FINANCIAL ASSISTANCE ARE NOW AVAILABLE

TO SENIOR CITIZENS?

 There are two (2) new provisions under R.A. 9994 that will directly benefit senior
citizens:
a) Monthly Social Pension of P500 to be given to indigent senior citizens; and

b) Death Benefit Assistance of P2,000 to be given to the nearest surviving relative who cared for
the deceased senior citizen until his/her death.

WHAT FUNERAL AND BURIAL SERVICES ARE ENTITLED TO THE 20%

DISCOUNT?

 Funeral and burial services subject to the 20% discount include the purchase of the casket
or urn, embalming, cremation costs, pick-up of the body from the morgue, transport for
burial at his/her hometown, but excluding obituary publication and the cost of the
memorial lot.
 TAXATION

SENIOR CITIZENS AND PERSONS WITH DISABILITIES CAN AVAIL OF A 5%

DISCOUNT ON PURCHASES OF BASIC NECESSITIES AND PRIME
COMMODITIES ON THEIR TRANSACTIONS MADE ONLINE, VIA PHONE,
TEXT OR CALL

The Department of Trade and Industry encourages Senior Citizens and Persons with
Disabilities (PWDs) to utilize their 5% special discount for Basic Necessities and Prime
Commodities (BNPC) following the release of the Joint Memorandum Circular (JMC) No.
01, series of 2022, entitled “Guidelines on the Provision of the Mandatory Statutory Benefits
and Privileges of the Senior Citizens and Persons with Disabilities on their Purchases through
Online (e-commerce) and Phone Call/SMS”. This discount is distinct from the 20% regular
discount covers different goods and services.

DTI-Consumer Protection Group Undersecretary, Atty. Ruth B. Castelo, underscores, “These

benefits and privileges under the said Circular, including the 5% discount on BNPC
purchases, are meant to be utilized especially the Senior Citizens and Persons with
Disabilities all year round, and not only amidst the pandemic”.

Under the 5% discount, Senior Citizens and PWDs have a maximum purchase amount of
PHP1,300.00 a week for both online and offline transactions, without carryover of the unused
amount. The amount shall be spent for the personal and exclusive consumption of the Senior
Citizen and the PWD, and must be spent on at least four (4) kinds of items of BNPCs.

To receive the discount, one must declare to the merchant before placing orders that he or she
is a Senior Citizen or a PWD, and submit supporting documents, such as a scanned copy or
screenshot of ID, as well as the front and last pages of the purchase booklet. The same proof
of discount entitlement should be presented upon the delivery of goods and orders, if the
purchase was made online or through a phone text or call.

The DTI-Consumer Protection Group (CPG), through its Consumer Policy and Advocacy
Bureau (CPAB) issues the Suggested Retail Price (SRP) list for BNPCs. Under its
jurisdiction, the DTI monitors the price and supply of Basic Necessities such as canned
sardines and other marine products; processed milk; coffee; salt; laundry soap; detergent;
candles; bread; and salt. The DTI also monitors the price and supply of Prime Commodities
such as flour; canned pork, beef, and poultry meat; noodles; vinegar; soy sauce; patis; toilet
soap; paper, school supplies; cement, clinker, G. I. sheers; hollow blocks, construction nails;
batteries, electrical supplies, light bulbs; steel wire; bottled water; and batteries.
The BNPCs specified in the amended Price Act are:
 TAXATION

HOW TO COMPUTE SENIOR CITIZEN DISCOUNT IN THE PHILIPPINES (5

THINGS YOU NEED TO KNOW)

WHO ARE CONSIDERED AS SENIOR CITIZEN?

 According to Republic Act No. 9994, they are individuals who are considered as:

1. Resident citizen of the Philippines.

2. At least sixty (60) years of age.

REPUBLIC ACT NO. 9994

 An act granting additional benefits and privileges to senior citizens, further amending
Republic Act No. 7432, as amended, otherwise known as "an act to maximize the
contribution of senior citizens to nation building, grant benefits and special privileges and
for other purposes."

DISCOUNT AND TAX EXEMPTION

A. ON THE TWENTY PERCENT (20%) SENIOR CITIZEN DISCOUNT ON THE SALE

OF GOODS AND SERVICES

 The 20% discount granted to Senior Citizens on the sale of goods and services provided
under the Rules and Regulations implementing Republic Act (R.A.) No. 9994 or the
Expanded Senior Citizens Act of 2010 are discount privileges subject to the guidelines
established by the Department of Social Welfare and Development (DSWD). However,
this office deemed it necessary to include in this Circular commonly asked questions on
the 20% Senior Citizen discount to clarify issues which are interrelated to the
implementation of exemption from the payment of 12% VAT.

ILLUSTRATIVE CASE # 1

1. A senior citizen bought medicines and medical supplies in a VAT registered drug store priced
at 1,000 (VAT inclusive). How much would be the amount to be paid by the senior citizen?

Sales with VAT 1,000.00

Less: VAT (1,000 x 12/112) 107.14
VAT Exempt Sale 892.86
Less: SC Discount (20 x 892.86) 178.57
Amount to be Paid 714.29
 ILLUSTRATIVE CASE # 2

2. If a group of 5 individuals composed of four (4) non-senior citizens and one (1) senior citizen
dines-in a VAT registered restaurant whose total amount ordered is 2,500 (VAT inclusive). How
should the group be billed?

(Total Billing Amount / No. of Customer) less 12% VAT x 20% = Senior Citizen Discount

Sales with VAT 2,500.00

No. of Customers 5
Sale Attributable to SC 500.00
VAT (500 x 12/112) 53.57
VAT Exempt Sale 446.43
Less: SC Discount (20% x 446.43) 89.29
Discounted VAT Exempt Sale 357.14
Sale Attributable to Non-SC 2,000.00
Amount to be Billed 2,357.14

ILLUSTRATIVE CASE # 3

3. A senior citizen orders various dine-in foods, then takes home the leftovers, is the order
subject to 20% discount?

ANSWER: Yes, it is subject to 20% discount.

WHY: As long as it is the senior citizen who is present and personally ordering, can show a valid
senior citizen ID card and not part of bulk orders.

ILLUSTRATIVE CASE # 4

4. A senior citizen purchased cigarettes from a local mall, will it be considered as "consumables"
subject to the 20% discount?

ANSWER: No, cigars and cigarettes are not food or essential items deemed subject to 20%
discount.

WHY: Although considered as consumables, cigars, cigarettes and vapor products are not
essential goods and considered hazardous to the health of senior citizens.

BOOKKEEPING
  Establishments giving sales discounts to qualified senior citizens are required to keep a
separate and accurate record of sales, which shall include:

1. The name of the senior citizen purchaser.

2. Office for Senior Citizen Affair (OSCA) Identification Card.
3. Gross sales/receipts.
4. Sales discounts.
5. Dates of transactions and invoice/official receipt number.

PENALTIES

 Sec. 7. Section 10 of the same Act, as amended, is hereby further amended to read as
follows:

 "SEC. 10. Penalties. - Any person who refuses to honor the senior citizen card issued by
this the government or violates any provision of this Act shall suffer the following
penalties:

 "(a) For the first violation, imprisonment of not less than two (2) years but not more than
six (6) years and a fine of not less than Fifty thousand pesos (Php 50,000.00) but not
exceeding One hundred thousand pesos (Php 100,000.00);

 "(b) For any subsequent violation, imprisonment of not less than two (2) years but not
more than six (6) years and a fine of not less than One hundred thousand pesos (Php
100,000.00) but not exceeding Two hundred thousand pesos (Php 200,000.00); and

 "(c) Any person who abuses the privileges granted herein shall be punished with
imprisonment of not less than six (6) months and a fine of not less than Fifty thousand
pesos (Php 50,000.00) but not more than One hundred thousand pesos (Php 100,000.00).