The priority first!

Filipino senior citizens and persons with disability (PWD) are the most affected by the coronavirus (COVID-19) outbreak. Even before the pandemic, they were the most vulnerable and had less inclusivity and equal footing in society. As the pandemic continues, new opportunities have opened for senior citizens and PWDs to have easy access through the internet, phone, and mobile devices to purchase goods or services from business establishments.

On May 18, 2022, the Bureau of Internal Revenue (BIR) released Revenue Memorandum Circular (RMC) 71-2022, circularizing DTI-DSWD-NCSC-NCDA-DOH-BIR-DILG Joint Memorandum Circular (JMC) 01-2022, entitled “Guidelines on the Provision of the Mandatory Statutory Benefits and Privileges of Senior Citizens and Persons with Disabilities on Their Purchases Through Online (E-Commerce) and Phone Call/SMS.”

As provided by the laws governing privileges for senior citizens and PWDs, both will enjoy the following privileges:

1. A 20 percent discount and exemption from value-added tax (VAT), if applicable, on: (a) medicines and medical supplies; (b) professional fees of attending physician/s in all private hospitals, medical facilities, and outpatient clinics and home healthcare services; (c) professional fees and licensed professional health providing home healthcare services; (d) medical and dental services, diagnostic and laboratory fees in all private hospitals, medical facilities, outpatient clinics, and home healthcare services; (e) actual fare for land transportation travel in public utilities, including domestic air transport services and sea shipping vessels; (f) utilization of services in hotels and similar lodging establishments, restaurants, and recreation centers; (g) admission fees charged by theaters, cinema houses and concert halls, circuses, leisure and amusement; (h) foods, drinks, desserts and other consumable food items; and, (i) funeral and burial services;

2. A five percent special discount (without exemption from VAT) on: (a) basic necessities; and (b) prime commodities;

Basic necessities shall refer to goods vital to the needs of consumers for their sustenance and existence while prime commodities shall refer to goods not considered as basic necessities but are essential to consumers. Section 3, sub-items (1) and (8) of Republic Act (RA) No. 7581, as amended by RA No. 10623, further defines what are considered basic necessities and prime commodities (BNPCs).

For E-Commerce purchases made through the internet or online platform, the following shall be observed:

1. Before placing an order, the senior citizen or PWD must declare to the online platform/merchant that the individual is either a senior citizen or PWD. Upon confirmation of order/s, one must provide/attach a scanned copy/screenshot or image of their senior citizen or PWD ID, as applicable, or any government-issued ID reflecting the name, picture, date of birth, and nationality of the senior citizen or PWD.

In addition, the following shall also be attached upon placement of order:

For purchases of medicines, a copy of the medical prescription, a copy of the front page, and last entry page of senior citizen/PWD purchase booklet.

For purchases of basic and prime commodities, a copy of the frontpage and last entry page of senior citizen/PWD purchase booklet for commodities.

2. Upon delivery of the goods/orders or performance of service purchased through the online platform, the senior citizen or PWD, or the individual’s duly authorized representative, shall present an original copy of the senior citizen or PWD proof of entitlement that was attached during the confirmation of their order/s together with the authorization letter, if applicable.

3. In such event where an individual has failed to present their senior citizen or PWD ID, or any government-issued ID, as proof of discount entitlement and authorization letter, if applicable, the platform/merchant may charge the full amount of the goods/orders or service.

While for purchases through telephone or mobile phone call, the following shall be observed:

1. Upon placement of order/s, the senior citizen or PWD must provide their name, date of birth, and the ID number of the senior citizen or PWD ID, or any government-issued ID, as proof of discount entitlement.

2. The business establishment shall exert effort and ask the customer if they are a senior citizen and/or PWD.

3. After completing the order, the business establishment shall apply the appropriate discount to the price of the goods or services for the consumption of the senior citizen or PWD.

4. Upon delivery of goods/services or performance of service, the senior citizen or PWD must present their senior citizen or PWD proof of entitlement together with authorization letter, if applicable, to the business establishment or its third-party service provider.

5. In such event where they failed to present their senior citizen or PWD ID, or any government-issued ID, as proof of discount entitlement and authorization letter, if applicable, the platform/merchant may charge the full amount of the goods/orders or services.

The abovementioned privileges and programs given to senior citizens and PWDs are highly favorable since the listed goods are consumable in every Filipino household. For business establishments, they must guarantee the enjoyment of senior citizens’ and PWDs’ rights with legal and social responsibility to give what is due.

Harold Stephene D. Recasa is an analyst from the tax group of KPMG R.G. Manabat & Co. (RGM&Co.), the Philippine member firm of KPMG International. The firm has been recognized in 2021 as a Tier 1 in Transfer Pricing Practice and in General Corporate Tax Practice by the International Tax Review.

This article is for general information purposes only and should not be considered as professional advice to a specific issue or entity. The views and opinions expressed herein are those of the author and do not necessarily represent KPMG International or KPMG RGM&Co.

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