Senior citizens eyed for inclusion in cash transfer program

The Department of Finance may propose the inclusion of senior citizens as beneficiaries of the government’s Conditional Cash Transfer (CCT) program, instead of exempting them from the payment of value-added tax (VAT).
Finance Assistant Secretary Teresa Habitan said that the Finance department will make a proposed amendment to lawmakers on Republic Act (RA) 9994, or the Value-Added Tax Exemption of Selected Goods and Services Purchased by Senior Citizens, that can result in forgone revenues of P1.68 billion to government.

“The original request of our fellow senior citizens is only to get a substantial discount for the purchases of their medicines. But the new law, gave out much more than that,” she said.

The Finance official added that: “What we are trying to avoid is to give financial aids to those senior citizens that are financially well-off but still covered by the RA 9994.”

She said that government wants to help those who need financial assistance the most given that the new administration is facing budgetary constraints.

“We cannot afford to indiscriminately give out these perks covering those who do not deserve it,” Habitan added.

She said that since the CCT has been proven through the years as an effective financial assistance program for poor families, the government could include senior citizens in its coverage.

“Those poor families covered by CCT program have with them senior citizens [so] we can thus add another funding to help them sustain their needs,” Habitan said.

Under the proposed national budget for 2011, the government has allocated a total of P29 billion for social services, including P23 billion in CCTs. On top of that, P2.88 billion has been allocated for the supplemental feeding program, P881 million for the food for work for internally displaced persons program, and P4.23 billion for rice subsidies.

“We can coordinate with local government units and barangays to make sure that these senior citizens who are indigent may get something out of the CCT,” Habitan said.

Another option that the Finance department is looking at is raising the discount for senior citizens from the present 20 percent to 32 percent provided, however, that the higher discount would carry with it the VAT.

She said that with this formula, the discounts that would be given to senior citizens would be targeted to those who need it the most with respect to the purchases that they really need.

The CCT program was introduced by former President and now Rep. Gloria Arroyo of Pampanga in 2002. It was initially criticized for being ineffective and susceptible to corruption. But the program was later found to be effective by the new administration which even augmented its funding for next year by almost three-folds from the current P10 billion. –Katrina Mennen A. Valdez Reporter, Manila Times