Introduction

Article XV, Section 4, of the Constitution provides, “The family has the duty to care for is elderly members but the State may also do so through just programs of social security.” Also, Article XIII, Section 11 says that “the State is mandated to make essential goods, health, and other social services available to all people at affordable cost. x x There shall be priority for the needs of the underprivileged sick, elderly, disabled, women, and children.”

In 2006, there is an estimated 5.2 million Filipinos 60 years old and above. The ratio of geriatricians to senior citizens is 1:186, 839. There is a lack of geriatric wards in government hospitals. Moreover, as of 1997, only 12% of the senior citizen population have social security coverage.

R.A. No. 9257: Senior Citizens Act

The law provides benefits and special privileges to senior citizens coming from both the government and private establishments. Section 4 entitles the senior citizens to the following:

1. The grant of a 20% discount from all establishments, relative to the utilization of goods and services in hotels and similar lodging establishments (including room accommodations, massage, sauna, food and drinks), restaurants, and recreation centers, for the exclusive use or enjoyment of the senior citizens;

2. The grant of a 20% discount in the purchase of medicines in all establishments, including drugstores, pharmacies, clinics, and other establishments dispensing medicines and medical, rehabilitative, or assistive devices, for the exclusive use or enjoyment of the senior citizens;

3. The grant of a 20% discount in fare for domestic air and sea travel, for the exclusive use or enjoyment of the senior citizens; and

4. The grant of a 20% discount in public railways (including LRT, MRT, and PNR), skyways, buses, jeepneys, taxis, and shuttle services, for the exclusive use or enjoyment of the senior citizens.

The Implementing Rules and Regulations implementing state that the discount granted to senior citizens when dining or purchasing any consumable item in restaurants covers value meals and promotional meals. Similarly, the discount granted to senior citizens when buying tickets for air or sea travel covers promotional fares and discounted fares.

All Filipino citizens aged 60 years old and above, regardless of their income, can enjoy the benefits and privileges granted by such law. To avail of the benefits and privileges, the senior citizen can present his Senior Citizen ID card (issued by the local government units—the mayor, Office of Senior Citizens Affairs, or the barangay captain of the place where the senior citizen resides), passport, driver’s license, or any other document or identification card that can show that he is a Filipino citizen at least 60 years old.

Penalties

Compared to the previous Senior Citizens Act (R.A. No. 7432), stiffer penalties are provided to ensure stricter compliance. The penalties are:

1. Any person who violates the provisions of the law will be punished with a fine of P50, 000 to P100, 000 and imprisonment of 6 months to 2 years for the first violation. Subsequent violations will be punished with a fine of P100, 000 to P200, 000 and imprisonment of 2 years to 6 years.

2. Any person who abuses the privileges under the law will be punished with a fine of P5, 000 to P50, 000 and imprisonment of not less than 6 months.

3. The proper authorities may cause the cancellation or revocation of the business permit, permit to operate, franchise, or any other privilege granted to any business that fails to abide by the provisions of the law.

A senior citizen may file a complaint with the Office for Senior Citizens Affairs (OSCA) and from there, may be elevated to the Department of Trade and Industry (DTI).

Computation of the 20% Discount

The 20% discount required by the law to be given to senior citizens is a tax credit— not a tax deduction from the gross income or gross sale of the establishment concerned. A private establishment uses a tax credit only after the tax has been computed while a tax deduction is used before the tax is computed. The tax credit can be claimed even if the establishment operated at a loss.

A tax credit as an amount that is subtracted directly from one’s total tax liability. It is an allowance against the tax itself — a deduction from what is owed by the taxpayer to the government. A tax deduction, on the other hand, is a subtraction from income for tax purposes. It is an amount allowed by law to reduce income prior to the application of the tax rate to compute the amount of tax due.

Further, only that portion of the gross sales exclusively used, consumed, or enjoyed by the senior citizen shall be eligible for the deductible sales discount; only the actual amount of the discount granted or a sales discount not exceeding 20% of the gross selling price can be deducted from the gross income net of value added tax, if applicable, for income tax purposes, and from gross sales or gross receipts of the business enterprise concerned, for VAT or other percentage tax purposes; and the business establishment giving sales discounts to qualified senior citizens is required to keep separate and accurate record of sales, which shall include the name of the senior citizen, TIN, OSCA ID, gross sales/receipts, sales discount granted, dates of transactions, and invoice number for every sale transaction to a senior citizen.

The phrase “for the exclusive use or enjoyment of the senior citizen” is subject to abuse as when the senior citizen is made as the front for the purchase of goods (as in take-out counters or drugs) or use of service (taking a cab). There is also a question of fake senior citizen identification cards issued in cahoots with unscrupulous persons. Yet the biggest question is who ultimately benefits? The affluent senior citizens who wine and dine in posh hotels and enjoy air travel surely can afford not to avail of the discount which is in effect a subsidy from government. It is the poor senior citizens who genuinely lack the resources and the access to facilities that need the helping arm of the law.