Dear Atty. Chris,
Atty., I need your help. I am a 79-year-old retired teacher with diabetes. Since I am now unemployed, I am only relying on my pension/retirement benefits which are all allocated for my medication and I have little to nothing left for my other needs.
Because of this, I would like to ask you about the VAT Exemption for senior citizens because I would like to know more about the discounts and if it’s really true. Can I really avail the restaurant discounts?
Thank you.
Melinda
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Dear Melinda,
Foremost, we would like to thank you for your noble service as a teacher.
To answer your inquiry, yes, senior citizens are exempt from paying Value Added Tax (VAT) on the sales of restaurants and other recreational establishments that are for the exclusive use and enjoyment of the senior citizens. This is over and on top of the 20-percent discount, which is granted to senior citizens by restaurants and other establishments. Section 4 of Republic Act 7432, as amended by RA 9257, or the Expanded Senior Citizens Act of 2003, is hereby further amended by Section 4 of RA 9994, which provides:
“SEC. 4. Privileges for the Senior Citizens.
The senior citizens shall be entitled to the following:
(a) the grant of 20 percent discount and exemption from the value-added tax (VAT), if applicable, on the sale of the following goods and services from all establishments, for the exclusive use and enjoyment or availment of the senior citizen:
(1) 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).
The DoH shall establish guidelines and mechanism of compulsory rebates in the sharing of burden of discounts among retailers, manufacturers and distributors, taking into consideration their respective margins;
(2) on the professional fees of attending physician/s in all private hospitals, medical facilities, outpatient clinics and home health care services;
(3) 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;
(4) 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);
(5) 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);
(6) in actual transportation fare for domestic air transport services and sea shipping vessels and the like, based on the actual fare and advanced booking;
(7) on the utilization of services in hotels and similar lodging establishments, restaurants and recreation centers;
(8) on admission fees charged by theaters, cinema houses and concert halls, circuses, leisure and amusement; and
(9) on funeral and burial services for the death of senior citizens; x x x”
Based on the foregoing, by way of example, a meal in a restaurant worth P100 would cost P112 including the VAT; however, a senior citizen will be given a 20 percent discount in addition to the exemption from the 12 percent VAT. Thus, reducing the cost of the meal to only P80 for senior citizens.
Clearly, upon presentation of your senior citizen’s ID card, you will be entitled to such reduction of cost on the goods and services that are for your exclusive use and enjoyment and, thus, can ease the burden on your daughter who pays for your meal.
We hope that we were able to enlighten you on the matter.
Atty. Chris Liquigan