Palace: Arroyo waiting for senior citizens act

President Arroyo is waiting for Congress to formally transmit to Malacañang a measure exempting senior citizens from paying value-added tax (VAT), a Malacañang official said on Saturday. Deputy presidential spokesman Ricardo Saludo said that as of Saturday morning, the measure has yet to be sent to the Palace for study. "Wala pa sa palasyo. Sigurado ako na sa oras na mai-submit ito sa Pangulo, mabilis itong pag-aralan ng Malacañang para magkaroon ng mabilis na reaction ang Pangulo (It has not reached the Palace yet. But I am sure once it reaches President Gloria Macapagal-Arroyo, she will study it quickly and act on it promptly)," Saludo said on government-run dzRB radio. On Friday, deputy presidential spokesman for economic affairs Gary Olivar said President Arroyo rarely vetoes a measure, but she remains concerned about the potential revenue loss it may cause. “On one side ... umaasa ang mga senior citizen na malaking tulong sa kanila ang panukala. On the other end nag-aalala ang DOF na mababawasan ng revenue (On one side, senior citizens are counting on the passage of the measure to benefit them. On the other end, the Department of Finance is worried the law will mean a loss of revenue)," Olivar said in an interview on dzXL radio. In the meantime, Olivar asked the public not to make a political issue out of the matter. On Wednesday, the bicameral conference committee ratified the proposed “Expanded Senior Citizens Act of 2010" seeking to exempt senior citizens from the 12-percent VAT in their purchase of medicines and services. Gains from the reformed VAT (RVAT) law, which were pegged at P76 billion last year and P77.5 billion to P78.9 billion this year, have been negated by 10 revenue-eroding laws which have an impact of P81.9 billion a year. The biggest of the measures are the income tax relief law, which is expected to result in a revenue loss of P26 billion, and the reduction of corporate income tax from 35 percent to 30 percent, which would deprive government of P15 to P20 billion. Olivar said that aside from reducing collections from the RVAT, the new exemptions will complicate the administering of the VAT. He said the lower collections will definitely affect the deficit target. Earlier, Sen. Pilar Juliana Cayetano, main author of the Senate version of the measure, said projected foregone revenue is a “well-lost loss." She said whatever losses the government absorbs would eventually result in increased purchasing power for senior citizens, which she said would have a positive impact on the economy in general. Under the measure, purchases made by senior citizens will be exempt from the 12 percent VAT, such that the senior citizens shall enjoy their full 20 percent discount. Covered by the measure are medicines, influenza and pneumococcal vaccines, and other medical supplies, accessories and equipment; professional fees of attending physicians and licensed professional health workers, medical and dental services, and diagnostic and laboratory fees; actual fare for land transportation travel in public utility vehicles; actual transportation fare for domestic and air transport services and sea shipping vessels; utilization of services in hotels and similar lodging establishments; admission fees in theaters, cinema houses, concert halls; funeral and burial services for the death of senior citizens. Among the health benefits are free medical and dental services, diagnostic and laboratory fees in all government facilities; coverage for all indigent senior citizens under the National Health Insurance Program; and free vaccination against influenza virus and pneumococcal disease. - LBG, GMANews.TV