No more VAT exemptions for rich, senior diners

Senior citizens will definitely continue enjoying the law-mandated 20-percent discount on goods and services, but the value-added tax (VAT) exemption they are getting in addition will soon be limited to necessities such as raw food and medicine, according to the Department of Finance (DOF).

This means, for example, the VAT exemption granted to seniors when dining in restaurants would be lifted “because such discounts are usually availed by affluent senior citizens who can well afford anyway to do away with this privilege,” DOF spokesperson Paola Alvarez said in a statement.

She assured, however, they would still be enjoying their usual 20-percent senior’s discount.

“To clarify our proposal, only the VAT exemptions in restaurants would be removed. The money the government collects from the lifting of the VAT exemptions for senior citizens in restaurants will be used instead to help other senior citizens who badly need the subsidy,” she added.

She illustrated, for example, a senior citizen could easily afford to pay a P120 VAT if he or she could purchase a P1,000 meal.

“If we compare this to a senior citizen who has to make ends meet for him to be able to afford his maintenance medicine, the P120 saved for VAT would go a long way. This is how we want to distribute a little wealth through taxation,” she said.

She said the amount collected from lifting the VAT exemptions would be placed in a fund for indigent senior citizens. Ben O. de Vera