Republic of the Philippines
HOUSE OF REPRESENTATIVES
Constitution Hills, Quezon City

TWENTIETH CONGRESS
First Regular Session

HOUSE BILL No. 4436

Introduced by representative: REPRESENATIVE ERIC L. OLIVAREZ

AN ACT ENHANCING THE DISCOUNT ON THE PURCHASE OF GOODS AND SERVICES OF
SENIOR CITIZENS AND PERSONS WITH DISABILITIES

EXPLANATORY NOTE

‘The principle of social justice is enshrined in the Philippine Constitution as a
guiding principle for governance and public policy. Social justice seeks to ensure fair
distribution of opportunities, privileges, and resources.

Article XIII, Section 11 of the Constitution also provides that the State shall
“adopt an integrated and comprehensive approach to health development which shall
endeavor to make essential goods, health and other social services available to all the
people at affordable cost,” while Article XV, Section 4 recognizes the family’s duty to
care for its elderly members, and mandates the State to design social security
programs for them.

‘The government has long recognized these constitutional mandates and the
need to support these vulnerable sectors through economic relief measures such as
the passage of Republic Act (RA) No. 7432, otherwise known as “Senior Citizens Act,”
as amended, and RA No. 7277, otherwise known as “Magna Carta for Persons with
Disability,” as amended. Among these reliefs are the grant of 20% discount and
Exemption from the 12% Value-Added Tax (VAT) on select goods and services for their
personal and exclusive use.

However, the application of these benefits becomes complex when goods are
already offered at promotional or discounted prices by business establishments.

In some instances, unscrupulous business establishments even offer their
goods or services at a promotional or discounted rate just to avoid or deny the
application of the aforementioned discounts, even without the appropriate permit/s
by the Department of Trade and Industry and other concerned government agencies.

‘This bill reflects a growing recognition that preferential treatment should not be
diluted by commercial promotions or worse, by greed. As the nation strives for a more
inclusive economy, ensuring that these benefits are fully and fairly applied is both a
legal and moral imperative.

By granting enhanced discounts and VAT exemptions, this law likewise
addresses the economic inequalities that disproportionately affect these groups,
providing them with tangible relief and recognizing their contributions to society.

While this measure seeks to protect and provide additional benefits to senior
citizens and PWDs, it is not intended to unduly burden or penalize business


establishments. Rather, it seeks to strengthen the spirit of shared social
responsibility between the government, the private sector, and the community at
large, in providing meaningful support to senior citizens and persons with disabilities.

The State shall ensure that implementing mechanisms will be clear, fair,
transparent, and complemented with incentives or support systems to balance the
interests of enterprises and the welfare of beneficiaries.

This bill was approved on third reading by the House of Representatives on 21
May 2024 during the 19% Congress under House Bill No. 10312 reflective of broad
legislative support.

In view of the foregoing, immediate approval of this bill is earnestly sought.

Bact. ouvanks


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Constitution Hills, Quezon City

TWENTIETH CONGRESS
First Regular Session

HOUSE BILL NO. 4486 _

Introduced by REPRESENTATIVE ERIC L. OLIVAREZ

AN ACT ENHANCING THE DISCOUNT ON THE PURCHASE OF GOODS AND

SERVICES OF SENIOR CITIZENS AND PERSONS WITH DISABILITIES

Be it enacted by the Senate and House of Representatives of the Philippines in Congress
assembled:

SECTION 1. Declaration of Policy. ~ The State shall promote a just and dynamic social
order that shalll ensure the nation’s prosperity and independence as well as free its people from
poverty.

‘The State shall provide social justice in all phases of national development, and value
the dignity of every human person, and guarantee full respect for human rights. The State
shall adopt an integrated approach to health development which shall endeavor to make
essential goods, health, and other social services available to all at affordable cost. There shall
be priority for the needs of the underprivileged, sick, elderly, and persons with disabilities.

To this end, the State shall preserve the preferential treatment accorded to senior
citizens and persons with disabilities and proportionately distribute its costs between the
government and the people.

SECTION 2. Applicability of Discounts for Senior Citizens and Persons with Disabilities
to Goods and Services on Promotional Offer. ~ The discount granted to senior citizens and
persons with disabilities, including the twenty percent (20%) discount and exemption from the
value-added tax (VAT) on goods and services, or the special discount on purchase of basic
necessities and prime commodities, as provided under Section 4 of Republic Act (RA) No.
7432, otherwise known as “Senior Citizens Act,” as amended, and Section 32 of RA No. 7277,
otherwise known as “Magna Carta for Persons with Disability,” as amended, shall be in
addition to any prevailing promotional offers or discounts extended by business
establishments, if any, has been provided. Establishments shall not require the presentation
of booklets by either senior citizens or persons with disabilities who wish to avail themselves
of this benefit, relative to their procurement of goods.

In no case shall a promotion or discount offered by a business establishment to the
general public, without however the application of the mandated additional twenty percent
(20%) discount and exemption from the value-added tax (VAT) on goods and services, or the
special discount on purchase of basic necessities and prime commodities by either senior
citizens or persons with disabilities, be considered compliance with Section 4 of RA No. 7432,
as amended, and Section 32 of RA No. 7277, as amended, respectively.

SECTION 3. Tax Treatment of Discounts. - The twenty percent (20%) discount for
senior citizens or persons with disabilities applied on certain goods and services, the input
tax attributable to the VAT-exempt sale to senior citizens and persons with disabilities, and
the special discount on basic necessities and prime commodities, shall be treated as part of
deductible expense pursuant to Section 34 of the National Internal Revenue Code of 1997, as
amended.


The establishments may claim the discounts granted under subsections (a), (c), and
(i) of Section 4 of RA No. 7432, as amended, and subsection (a), paragraphs (1), (2}, (3), (5),
©),
(7) and (8) and subsection (4) of Section 32 of RA No. 7277, as amended, as deduction based
on the net cost of goods sold or services rendered: Provided, That the cost of the discount shall
be allowed as deduction from gross income for the same taxable year that the discount is
granted: Provided, further, That the total amount of the claimed tax deduction net of VAT, if
applicable, shall be included in their gross sales receipts for tax purposes and shall be subject
to proper documentation and to the provisions of the National Internal Revenue Code, as
amended.

SECTION 4. Implementing Rules and Regulations. - The National Commission of
Senior Citizens and the National Council on Disability Affairs, in consultation with the
Department of the Interior and Local Government, Department of Trade and Industry,
Department of Information and Communications Technology, Department of Health,
Department of Finance, Bureau of Internal Revenue, and other relevant agencies and
stakeholders, shall promulgate the necessary rules and regulations for the effective
implementation of the provisions of this Act.

SECTION 5. Separability Clause. ~ If any provision of this Act is declared invalid or
unconstitutional, other provisions hereof which are not affected thereby shall remain in full
force and effect.

SECTION 6. Repealing Clause. - The pertinent provisions of the following laws are
hereby repealed, amended, or modified accordingly:

(a) Section 4 of RA No. 7432, as amended by RA No. 9994, otherwise known as the
“Pxpanded Senior Citizens Act of 2010,” insofar as purchase of goods and services
which are on promotional discount is concerned;

(b) Section 32 of RA No. 7277, as amended by RA No. 10754, insofar as higher
discount granted by the commercial establishment, other existing laws or in
combination with other discount programs is concerned.

(©) Section 32{)) of RA No. 9442, entitled “An Act Amending Republic Act No. 7277,
Otherwise Known as the Magna Carta for Disabled Persons, and for Other
Purposes”; and

(d) Section 4(l) of RA No. 9257, entitled “An Act Granting Additional Benefits and
Privileges to Senior Citizens Amending for the Purpose Republic Act No. 7432,
Otherwise Known as ‘An Act to Maximize the Contribution of Senior Citizens to
Nation Building, Grant Benefits and Special Privileges for the Other Purposes.”

All other laws, rules and regulations, and other issuances or parts thereof, which are

inconsistent with the provisions of this Act, are hereby repealed, amended, or modified
accordingly.

SEC. 7. Effectivity. - This Act shall take effect fifteen (15) days after its publication in
the Official Gazette or in a newspaper of general circulation.

Approved