Press Release
January 22, 2010

Pia: Bicameral panel OKs 'Expanded Senior Citizens' bill

The much-anticipated "Expanded Senior Citizens Act," the proposal that seeks to exempt the elderly from paying the 12 percent value added tax (VAT), is now just a few steps away from becoming a law.

This was announced by Senator Pia S. Cayetano, Chairperson of the Senate Committee on Social Justice and the bill's principal author, after a bicameral conference committee composed of Senate and House members approved the reconciled version of the measure Wednesday night.

The bicameral conference report is expected to be submitted for ratification by the Senate and House of Representatives next week, after which it will be forwarded to Malacanang for the President's signature.

Aside from Cayetano, the bicameral committee members who worked on the report included Senators Edgardo Angara, author of the original Senior Citizens Act (RA 7342) and Loren Legarda for the Senate panel.

The House contingent was led by its Chair, Rep. Reynaldo Uy (Western Samar 1D), together with Reps. Eduardo Zialcita (Paranaque, 1D), Abigail Binay (Makati, 2D), Maurico Domogan (Baguio City, LD), Bienvenido Abante Jr. (Manila, 6D) and Rozzano Rufino Biazon (Muntinlupa City, LD).

"I thank my colleagues in the bicameral panel for working double-time and doubly hard to reconcile the Senate and House versions in spite of many differences in our provisions. All the members actively participated and contributed to come up with a reconciled bill. Hopefully, this will be passed into law before Congress goes into recess next month," said Cayetano.

She said senior citizens have long been clamoring for VAT exemption to enable them to fully enjoy the 20 percent senior citizens discount. She explained that the discount had been effectively reduced to eight percent since seniors are also required to pay the 12 percent VAT in their purchase of medicines and services.

The VAT exemption will apply to the following: medicines and essential medical supplies, accessories and equipment; fees of attending physicians; medical, dental fees and diagnostic and laboratory fees; fares for buses, jeepneys, taxis, AUVs, shuttle services, public railways, domestic air transport and other vessels; utilization of 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 for the death of senior citizens.

In addition, indigent senior citizens will be given a monthly stipend of P500 which will be subject to the periodic review of Congress in coordination with the Department of Social Work and Development (DSWD). In case of death of an indigent senior citizen, an amount of P2,000 will also be awarded to his or her nearest kin as death benefit assistance.

Senior citizens may also enjoy a five percent discount on their water and electric bills on the condition that the utilities are named under the senior citizen residing in the household, and that the consumption for electricity and water should be below 100 kilowatt-hours and 30 cubic meters per month, respectively.

The measure likewise expands the coverage of penalties for establishments that refuse to grant the mandated benefits. Violating establishments including their owners, managers and personnel may be fined a penalty of not less than P10,000 but not more than P50,000, or imprisonment of not less than a month but not more than six months.

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