Removal of seniors' VAT exemptions 'counter-productive' – lawmakers

MANILA, Philippines – Two veteran lawmakers oppose the Duterte administration's plan to remove some of the value added tax (VAT) exemptions granted to senior citizens, calling the move unfair for aging Filipinos.  

"The removal of [some] VAT [exemptions] from the benefits of the senior citizens will be completely counter-productive. The United Nations even suggests that the state should pursue policies to enhance active aging through better social interaction, economic independence of the elderly, and their participation in community activities," said Albay 1st District Representative Edcel Lagman in a press conference on Tuesday, September 27. 

"I call on the government to really address this pressing problem of an aging population," the 74-year-old lawmaker added. 

In his first State of the Nation Address, President Rodrigo Duterte announced the plan to lower personal income and corporate taxes. 

The Department of Finance (DOF) earlier this week also submitted its proposed tax reform program to both houses of Congress. The major reforms include the following:

One of the consequences of the lowering of personal and corporate tax rates include the removal of some VAT exemptions for senior citizens. 

On Tuesday, Northern Samar 1st District Representative Raul Daza mentioned Duterte's budget message, where the President said that his administration will take a "human approach" to public finance.

"I think when we talk of human approach, we talk of a kind of approach that is comparable to our culture. Sa kultura naman natin 'di ba, 'yung mga senior citizens pinagpipitagan natin, ano?  E bakit kung ano man 'yung exemption na binigay ng sa senior citizen, tatanggalin natin? (In our culture, we respect senior citizens. So why would we remove the exemption granted to them?)" said the 81-year-old Daza.

DOF spokesperson Paola Alvarez earlier clarified, however, that the government will retain senior citizens' 20% discount on purchases as well as VAT exemptions on raw food and healthcare. (READ: Duterte admin keeping seniors' 20% discount, most VAT exemptions)

But aging Filipinos will lose their VAT exemptions when they dine in restaurants. 

"[S]uch discounts are usually availed of by affluent senior citizens who can well afford anyway to do away with this privilege," Alvarez said. 

She added that the government is putting in place direct subsidy programs for the benefit of the needy and other vulnerable sectors to be affected by the proposed VAT exemptions. 

House committee on ways and means chairperson Dakila Cua said his committee plans to file the bill containing the DOF's proposed tax reform package within the next 10 days, after the plenary deliberations on the proposed 2017 budget. 

"We will do it as quickly as possibly and we will make this bill as equitable as possible," he said. – Rappler.com

Mara Cepeda

Mara Cepeda writes about politics and women’s rights for Rappler. She covers the Senate and the Office of the Vice President. Got tips? Send her an email at mara.cepeda@rappler.com or shoot her a tweet @maracepeda.

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