DOF backs down from removing VAT exemption of senior citizens, PWDs

The Department of Finance had decided to keep the Value Added Tax (VAT) exemption benefits of seniors and persons with disabilities (PWDs), after a public hearing by the Senate on their initial proposal.

Senator Sonny Angara, Chairman of the Ways and Means Committee said, "The DOF is open to retaining the VAT exemption of senior citizens and PWDs. Ibig sabihin po nito ay nakikinig ang ating administrasyon sa ating mga panawagan at sa hinaing ng taumbayan. Patuloy po tayong makikipag-ugnayan sa ating mga economic manager para makabuo ng isang komprehensibong tax reform program na patas, progresibo at hindi magiging pabigat sa ordinaryong Pilipino".

(Image Credit: Department of Finance)

DOF initially proposed to limit the VAT exemptions of senior citizens and PWDs to only raw food, education, and health. But seniors and PWDs were not pleased with the proposal. Some politicians also expressed their opposition, including Senator Angara.

In the revised version of the current administration's first package of the Comprehensive Tax Reform program most recently submitted to Angara, the DOF has opted to keep the VAT exemption for seniors and PWDs as before.

The first package also includes the proposal to lower personal income tax, revise excise taxes of petroleum products as well as automobiles, and widen the base for VAT.

The welfare of senior citizens and PWDs has always been close to Senator Angara's heart considering that his father, ex-Senate President Edgardo Angara is known as the father of the Senior Citizens' Law in the Philippines.

The younger Angara continued his father's legacy and while he was a congressman, co-authored Republic Act 9994 or the Expanded Senior Citizens Act of 2010, which granted VAT exemptions for senior citizens.

Angara followed it up by being co-sponsor and author of RA 10754 which exempts PWDs from VAT. Principal sponsors of the bill were Leyte Representative Martin Romualdez for the House version and Senator Ralph Recto for the Senate version. It was signed on March 23,2016 by then President Benigno Aquino III.

According to a press release by the Senate, there are around 7.5 million senior citizens and 1.4 million  PWDs in the country.
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