PHILIPPINES: Elderly seeks exemption from e-VAT

CITY OF SAN FERNANDO, Philippines (Sun-Star Pampanga), August 18, 2008: By Ian Ocampo Flora Even senior citizens in this highly urbanized city are feeling the burden of the 12-percent expanded value-added tax (e-VAT). Without any other means to support their daily needs aside from their pensions, members of the San Fernando Senior Citizens Association (SFSCA) have asked Third District Representative Aurelio "Dong" Gonzales to help them be exempted from the payment of e-VAT. Gerardo Macabali, president of SFSCA, said they are urging the congressman to support pending House Bill (HB) 4421 which seeks to exempt senior citizens from paying e-VAT for goods and services. "With the e-VAT, we cannot fully enjoy the 20-percent discounts we are entitled to receive. Most of the discounts are only for the payment of the 12-percent tax. It's just right that we enjoy our privileges without most of it going into the payment of taxes," Macabali said. HB 4421, authored by Representative Theresa Bonoan of Manila's third district, aims to allow senior citizens to enjoy the full 20-percent discount in various establishments that they patronize. Currently, the law allows senior citizens to enjoy a 20-percent discount in major services like transportation and food. But Macabali said as prices escalate, so does the cost for the payment of e-VAT. "If we deduct the 12-percent e-VAT from the 20-percent discount of senior citizens, we get a discount of only eight percent. Senior citizens are mostly retired from their jobs. How can we make ends meet if prices in the market go up every other day?" Macabali added. The proposed bill provides that the purchases by senior citizens of commodities or services covered by the Expanded Senior Citizens Act of 2003 will not to be subjected to the 12-percent e-VAT. The measure also provides that "in case an establishment collected the 12-percent e-VAT from senior citizens, it shall only be entitled to an eight-percent tax deduction corresponding to the sales discount it extended to the senior citizens concerned." By exempting senior citizens from the 12-percent e-VAT on services and commodities they patronize, they will be able to enjoy the full 20-percent discount granted by law. Macabali said Gonzales could be instrumental in advancing the needs of senior citizens in Pampanga. He said they hope to see the benefits of the said bill. The VAT under the previous administrations was 10 percent. A couple of years ago, under President Gloria Macapagal-Arroyo, the VAT was increased to 12 percent and its coverage was expanded further to include oil, electricity, certain services and some other previously exempt sectors. © Copyright 2007 Sun.Star Publishing, Inc