The Court’s reasoning on the nature of “membership fees, assessment dues, and the like” for purposes of the imposition of VAT applies with equal force to the 20 percent senior citizen discount under RA 9994, also known as the “Expanded Senior Citizens Act of 2010.”

As explained by this Court in Philippines International Trading Corporation v. Commission on Audit:

“The best method of interpretation is that which makes laws consistent with other laws that are to be harmonized rather than having one considered repealed in favor of the other. Time and again, it has been held that every statute must be interpreted and brought in accord with other laws to form a uniform system of jurisprudence — interpretere et concordare legibus est optimus interpretendi. Thus, if diverse statutes relate to the same thing, they ought to be taken into consideration in construing any one of them, as it is an established rule of law that all acts in pari materia are to be taken together, as if they were one law.73 (Emphasis supplied; citations omitted)

“Thus, the Court’s ruling in Association of Non-Profit Clubs Inc. that membership fees or dues do not involve the sale of a good or service for purposes of VAT liability under the Tax Code equally holds true with respect to the 20 percent senior citizen discount under Sec. 4 (a) of RA 9994. To conclude otherwise and rule that membership dues involve the sale of a service for purposes of the 20 percent senior citizen discount under Sec. 4 (a) of RA 9994 but not for purposes of VAT liability under the Tax Code defies logic.

“Accordingly, we reiterate our ruling in Association of Non-Profit Clubs Inc. that the payment of membership dues does not involve the sale of a good or service. Such fees are paid for the privilege of membership and not for the purchase of a good or service. In contrast, the payment of fees for locker rentals and other charges pertaining to the use of golf facilities and equipment involves the sale by the golf and country club of services to the availing member.”

“Considering this essential distinction between membership dues and fees collected by golf and country clubs for the rendition of services, the treatment of these fees under RA 9994 must likewise be distinguished as follows:”

1. Sec. 4 (a) (7) of RA 9994 does not apply to membership dues because such dues are not payment for the sale of a service. While the assailed IRR provision is invalid for being beyond the scope of RA 9994 and Sec. 4 (a) (7) thereof, associations charging membership dues are not required to give the 20 percent senior citizen discount on such dues. This is not an exemption drawn from the invalid assailed IRR provision or any other administrative rule. Rather, it is based on the clear language of Sec. 4 (a) of RA 9994, which mandates the grant of the 20 percent senior citizen discount on the sale of the goods and services enumerated by the same law but not on the collection of dues for the privilege of membership.

2. However, Sec. 4 (a) (7) applies to the payment of fees for locker rentals and other charges pertaining to the members’ purchase of services provided by the club. In paying these fees, the purchasing member is availing of the club’s services and not for the privilege of membership in the club. Thus, there is a sale of service as contemplated in Sec. 4 (a) (7), and golf and country clubs are required to provide qualified members with the 20 percent senior citizen discount mandated by RA 9994.”

So now we know the nuances. Let us share this information with our elderly friends for their elucidation as well. That way, they know when the discount applies or not.

The quoted portion of the decision is from Hon. Corazon Soliman v Carlos T. Santos (G.R. 202417, 25 July 2023).