Food, medicine to remain VAT exempt for seniors


Posted at Aug 24 2016 01:02 PM

MANILA – Senior citizens will still enjoy value added tax exemptions (VAT) on food, medicine and education expenses even as the government seeks to expand the scope of the levy to offset a planned reduction in income taxes, Budget Secretary Benjamin Diokno said Wednesday.

Diokno, however, hinted at lifting VAT exemptions for seniors in restaurants and other leisure establishments as President Rodrigo Duterte’s economic managers make a distinction between rich and poor senior citizens.

“If you want to help the poor, the old poor, you have to give them direct subsidy like CCT,” Diokno said, referring to the government’s cash transfer program.

Diokno said VAT exemptions on restaurants and travel were being enjoyed mainly by rich seniors. “Who benefits from the 20-percent discount or don’t pay the VAT for the seniors? Maybe those Makati Business Club members,” he said.

Socioeconomic planning Secretary Ernesto Pernia said on Tuesday that raw food would likely remain VAT exempt, while the exemption for restaurant food might be lifted.

Filipinos who are at least 60 years old enjoy a 12-percent VAT exemption on top of a 20-percent discount on certain goods under current laws.

On Tuesday, a senior citizens group appealed to Duterte to keep their current tax exemptions.

Duterte plans to reduce corporate and personal income tax rates from 32 percent to 25 percent under a comprehensive reform package that will be submitted to Congress next month.