Gov't asks for 'small sacrifice' from senior citizens

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Metro Manila (CNN Philippines) — The government could scrap some of the discounts enjoyed by senior citizens – though officials were quick to assure them that basic necessities would still be kept tax-exempt.

Finance Secretary Carlos Dominguez said in a forum on Thursday that the government was reviewing the value-added tax (VAT) exemptions granted to people 60 years old and above.

The Expanded Senior Citizens Act of 2010 waives the VAT for a wide range of goods and services – largely medicines, health care services and professional fees of clinics and hospitals.

But it also extends VAT exemptions for land, sea and air transport, hotels and restaurants, cinemas and concert halls, and the like.

Dominguez said the law was intended to help the disadvantaged, but it ended up benefitting the wealthy more than those in need.

A senior citizen who spends ₱10,000 in a hotel or restaurant, for example, is likely able to afford it anyway. But he or she effectively gets a ₱1,200 subsidy from the government for what Dominguez said was a "luxury."

But a poor, elderly person will not have that much to spend, even for basic necessities, he pointed out. If he or she spent ₱1,000 in the market, the government ends up giving a much smaller subsidy of just ₱120.

"If we truly want to help the senior citizens, the indigents, the disabled, VAT exemptions are not the right tool. We should instead give them direct subsidies like [conditional cash transfers] so we actually reach them," Dominguez said.

The Finance chief did not yet detail what VAT perks would be scrapped, but he did vow to keep exemptions for health, education and food from markets and groceries.

'A little, small sacrifice'

Dominguez sought understanding from senior citizens. He said the money the government would be able to save from VAT exemptions would go to much-needed investments in agriculture, infrastructure, and social services.

"We want to thank all the senior citizens for their contributions in the past... But we are asking a small sacrifice, a little small sacrifice for building more of our country," he said.

The Duterte administration is doing a broad review of taxes in a bid to raise revenues. The national budget for next year is set at ₱3.35 trillion, a 12% increase from this year's spending. A campaign promise to slash income taxes also puts an additional squeeze on finances.

Senior citizen discounts aren't the only thing up for review. Tax incentives for investors will be streamlined, Dominguez said. Taxes on petroleum should also be increased, while a tax on junk food could be proposed.

While some Filipinos will have to pay more taxes, Dominguez said their money would go to helping the poorest areas of the Philippines.

"Manila is 16 times richer than the (Autonomous Region of Muslim Mindanao). With no education or livelihood, they rebel. And now we spend so much money to solve it," he said.

"We might as well invest now to improve their lives. First of all, we owe it to them. Secondly, because it is fairer. And thirdly, it costs us less in the long run."


Senior citizens were divided on the government's plans.

Marina Mejia said she would use her senior citizen's ID only when buying food and medicine. She admitted she didn't use all her VAT perks, since some of them she couldn't avail of to begin with.

"Halimbawa pupunta sila sa Boracay, hindi naman nakakapunta dun ang karamihan ng senior sa Boracay kung wala kang pang-airplane diba? Kaya pwede naman na siguro tanggalin ang gano'n kung sa luxury," Mejia said.

[Translation: For example, going to Boracay for a vacation. Most seniors don't go to Boracay since they won't all have money for airfare, right? So, the government could remove some of those discounts if they're just for luxuries.]

Ching Arce, however, believes that senior citizens deserve all the benefits they get.

She explained, "Matagal na kaming nagtrabaho. Nagbigay kami ng tax within that period na 60 years. Ngayon dapat i-enjoy na namin."

[Translation: We've worked for a long time. We paid taxes within that 60 years. Now, we should be allowed to enjoy.]

She added that their benefits were already capped anyway. Even discounts at restaurants and hotels cover only the senior citizen and not their family or relatives.

For Rolando Reyes, it was simply dismay and resignation. As it stands, he said, most senior citizens already feel as if they have to fight to get the discounts promised to them.

"Kung minsan, para kang binabastos eh... Parang nanghihinayang pa sila (sa mga tindahan) na bigyan ka ng discount. Kaya para hindi na ako bastusin, hindi na ko (nagpapakita ng ID). Kung ayaw nila, huwag," he said.

[Translation: Sometimes, establishments act as if they don't even want to give you your discount. So I don't even show them my ID anymore. It's insulting. If they don't want to give me my discount, then don't.]