Friday, February 19, 2010
The Philippines’ President, Gloria Macapagal Arroyo, has signed into law the bill exempting the country’s estimated 4.6m senior citizens from paying the 12% expanded value-added tax (EVAT) on basic purchases and other essential goods and services.
The EVAT exemption for senior citizens (those aged 60 or above) applies to purchases of medicines and essential medical supplies, accessories and equipment; physicians’ fees; dental fees; and fares for buses, taxis, public railways, and domestic air and sea transport. The tax privilege also applies to services in hotels, restaurants and similar establishments; admission fees in cinemas and theaters; and funeral and burial services.
In addition, the law provides each senior citizen will receive a monthly stipend of PHP500 (USD11) and, in case of death, the amount of PHP2,000 will be awarded to his or her nearest kin as benefit assistance. Under the law, senior citizens may also enjoy a 5% discount on their water and electricity bills, dependent on a limit of usage.
It had been previously reported that the Department of Finance had suggested that the President should veto these proposals, on the grounds that it would cost a reduction in tax revenue of around PHP1.68bn annually, when the government was looking to increase tax collections in other areas.