SEN. Mark Villar has filed Senate Bill (SB) 2494, or the proposed Tax Credit for Senior Citizens and Persons with Disability Discount Act.
The measure seeks to amend Republic Act (RA) 9994, or the Expanded Senior Citizens Act of 2010, and RA 7277, or the Magna Carta for Persons with Disability.
Under the existing system, businesses cannot necessarily recover the full cost of mandatory discounts through tax deductions, placing additional financial pressure on establishments, particularly micro, small and medium enterprises (MSMEs).
“Providing discounts to senior citizens and persons with disabilities is an essential component of our social protection programs. However, the full burden of implementing these benefits should not rest solely on businesses. We need a fairer system — one that safeguards our beneficiaries while simultaneously supporting our businesses — especially MSMEs — to remain resilient and continue their operations,” Villar said in Filipino.
The bill proposes to treat mandatory discounts granted to senior citizens and PWDs on qualified goods and services as tax credits instead of tax deductions, allowing establishments to apply the cost of these discounts directly against their national internal revenue tax liabilities.
Tax credits arising from senior citizen discounts may be carried over to succeeding taxable years but would not be refundable or transferable. The measure also retains the tax deduction mechanism for the minimum 5-percent discount on qualified monthly water and electricity consumption of senior citizens.
Villar emphasized that the measure aims to balance the protection of senior citizens and PWDs with the need to maintain a viable business environment, recognizing that private establishments play an important role in implementing the discounts mandated by law.
“Our goal is to ensure that senior citizens and persons with disabilities continue to receive the benefits they are entitled to, while simultaneously providing a fairer system for the businesses that implement these discounts. In this way, we safeguard the welfare of our fellow citizens and strengthen our businesses as partners in the nation's development,” he said.
