VAT exemption on seniors’ meds retained in new reform proposal

Senior citizens could still enjoy the value-added-tax (VAT) exemption only on medicines under a new tax reform package being proposed by the Department of Finance (DOF).

DOF Undersecretary Karl Kendrick T. Chua presented the new proposal during the hearing of the Senate committee on ways and means chaired by Senator Sonny Angara on Tuesday.

READ: House to present counterproposal to DOF tax reform package

“For senior citizens, we are proposing to retain the exemptions on medicine in our new proposal,” Chua told the committee.

“However, we find that the expenses in restaurants, travel air fare, for instance, mostly are consumed by the rich who can afford to pay and go to these restaurants so we’re proposing to remove the exemptions,” he said.

Chua said the money that the government would generate from reducing exemption for the rich would be given to the “poor and vulnerable senior citizens.”

“So one proposal is to expand the coverage or to consider increasing the rate,” he said.

READ: DOF tax package to remove VAT exemptions on elderly, PWDs

For people with disability (PWD), Chua said the government is proposing to transform the VAT exemptions to more direct services and health packages.

“And the main reason why we do these is we’d like to plug the leakages of those who pretend to be seniors, or benefit from their grandparents and people with disability into a system wherein it’s fair and transparent,” he said.

Chua said the government, in its proposed tax reform package, would return P180 billion to the people but this would also be offset by broadening the VAT base, which would cost around P108 by expanding the automobile excise tax.

Expanding the automobile excise tax, he said, would contribute some P69 billion to P199 billion. IDL/rga