The Department of Finance (DOF) clarified anew that senior citizens may continue to have the 20 percent discount on purchases and exemption from the value-added tax (VAT) on medicines and raw food.
As part of the proposed tax reform program, the government is putting in place direct subsidy programs for the benefit of the needy and other vulnerable sectors to be affected by the VAT exemptions, DOF Spokesperson Paola Alvarez said on Wednesday.
“But the VAT exemption granted to seniors when dining in restaurants, would have to be lifted,” because affluent senior citizens are the ones who usually avail themselves of such privilege, she stressed.
To better utilize VAT collections, the government would allocate the money to a fund that would be used to provide subsidies to the poor, including indigent senior citizens, Alvarez explained.
“Now if we compare this to a senior citizen who has to make ends meet for him to be able to afford his maintenance medicine, the P120 saved for VAT would go a long way. This is how we want to distribute a little wealth through taxation,” Alvarez added.
She made it clear that the 20 percent discount enjoyed by all senior citizens would remain, as well as the VAT exemptions they enjoy when buying medicine and food in raw form.