Pia: Bicam report on VAT exemption for senior citizens
hurdles Senate, House

Senator Pia S. Cayetano today hailed the bicameral approval of the proposed "Expanded Senior Citizens Act of 2010," the measure which seeks to provide relief to the elderly by exempting them from the 12-percent value added tax (VAT) in their purchase of medicines and other services.

The bicameral conference committee report on the disagreeing provisions of SB No.3561 and HB No.5987 was ratified late afternoon on Wednesday by both the Senate and the House of Representatives.

The measure is expected to be transmitted to Malacañang next week for the President's signature.

Senators had earlier agreed for a ceasefire on fiery debates over the controversial C5 report to focus on important legislation pending before the chamber.

Cayetano, Chairperson of the Senate Committee on Social Justice and principal sponsor of the measure, thanked her colleagues for choosing to prioritize ratification of the proposal.

Reacting to opinions that the bill will result in foregone revenues for the government, Cayetano described the lost income as a "loss that is well-lost."

She explained that whatever losses the government absorbs would eventually result in increased purchasing power for our senior citizens, which will have a positive impact on the economy in general.

During the public hearings on the measure, the Department of Finance had estimated that foregone revenues from VAT and income taxes for the full effective discount of 20 percent would amount to P54.4 million in the first year of implementation.

But Cayetano stressed: "The limitation with the DOF's projections is that it fails to reflect the overall benefits to society, and the government itself, of better healthcare and increased economic activity because the capacity of our senior citizens to purchase medicines and other services will be improved."