Small, medium drug stores oppose seniors’ VAT exemption

MANILA, Philippines – Small and medium scale drugstores are opposing the exemption of the elderly from paying the 12 percent value added tax (VAT) on goods and services, including medicines, under the Expanded Senior Citizens Act of 2010.

Josephine Innocencio, president of the Drugstores Association of the Philippines, said small drugstores might stop operating because they might not recover from losses.

“The government wants to give benefits to the marginalized sector through the private sector,” Innocencio said in a regular health forum in Quezon City organized by the Philippine College of Physicians.

The Expanded Senior Citizens Act of 2010, signed by President Arroyo last Feb. 16, gives some 4.6 million Filipino elderly benefits and privileges not included in Republic Act 7432 or the Senior Citizens Act of 1992. The implementing rules and regulations for the law, however, are yet to be issued by the Bureau of Internal Revenue.

The new law exempts senior citizens, or those who are 60 years old and above, from paying the 12 percent VAT on medicine and essential medical supplies, accessories and equipment; fees of attending physicians; medical, dental fees and diagnostic and laboratory fees; fares for buses, jeepneys, taxis, shuttle services, public railways, domestic air and sea transport.

The tax exemption also applies to services in hotels, restaurants and similar establishments; admission fees in cinemas, theaters and other places of culture, leisure and amusement; and funeral and burial services.

The bill provides an indigent senior citizen a monthly stipend of P500 subject to the periodic review of Congress in coordination with the Department of Social Welfare and Development.

In case of death of an indigent senior citizen, the amount of P2,000 would also be given to his or her nearest kin as benefit assistance.

Under the bill, senior citizens may also enjoy a five percent discount on their water and electric bills if the utilities are under the name of the senior citizens, and that the consumption is below 100 kilowatt-hours of electricity and 30 cubic meters of water a month.

The measure also expands the penalties for those who refuse to grant the benefits. Violators face a penalty of not less than P10,000 but not more than P50,000, or imprisonment of at least one month but not more than six months. –Helen Flores (The Philippine Star)