The Philippines recently implemented the Expanded Senior Citizens Act which exempts senior citizens from the payment of the 12 per cent value-added tax (VAT) on certain goods and services.

Two earlier laws, the 1992 Senior Citizens Act and the 2003 Expanded Senior Citizens Act, grant senior citizens a 20 per cent discount on eligible goods and services. In 2005, however, the passage of a 12 per cent VAT law effectively reduced the senior citizen discount to 8 per cent.

Through the new law, senior citizens are now able to gain the full and intended 20 per cent discount. The law also clarifies that the discount applies only to the regular prices of the listed goods and services, and that the discount cannot be cumulated with promotional sales.

The Expanded Senior Citizens Act also expands the list of qualified goods and services to include, among others:

- the purchase of more types of medicines and medical, dental and laboratory services and facilities as determined by the Department of Health;

- free vaccination against influenza and pneumococcal disease for indigent senior citizens;

- mandatory coverage under the Philippine Health Insurance programme;

- home health care services;

- five per cent discount on water and electric bills (up to prescribed ceilings) registered in the name of the senior citizen;

- funeral and burial services;

- benefit assistance of PHP2,000 (USD23) to the nearest kin of a deceased indigent senior citizen; and

- a monthly stipend of PHP500 (USD11.50).

The law also supports senior citizens in their activities for self-improvement, leisure and socialization by allowing the 20 per cent discount to be applied on training fees for socioeconomic programmes as well as cinemas, restaurants and other places of recreation.

Source: http://www.jamesbiron.com/2010/02/expanded-senior-citizens-act-of-2010-ra-9994-provides-evat-exemption/; http://www.pwc.com/ph/en/taxwise-or-otherwise/2010/RA-9994-expanded-senior-citizens-act-2010.jhtml?preview=true; http://newsinfo.inquirer.net/inquirerheadlines/nation/view/20100217-253644/Benefits-under-Expanded-Senior-Citizens-Act.

Implementation date: 2010