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Arroyo finally signs VAT exemption law for elderly


(Updated 5:57 p.m.) President Gloria Macapagal-Arroyo on Tuesday finally signed the Expanded Senior Citizen bill – a measure exempting senior citizens from paying the 12 percent value added tax – into law. The President signed Republic Act 9994 before flying to Surigao and Davao to kick off her Agribusiness Mindanao legacy tour, according to deputy presidential spokesman Gary Olivar. The law will be effective in 15 days. Deputy presidential spokesperson Charito Planas said Malacañang received the enrolled copy of the measure Monday night, and it was immediately reviewed by the Office of the Executive Secretary. Planas aid Malacañang had to weigh the impact of signing the bill, which reportedly could lead to a possible P1.68 billion revenue loss if signed. “We can assume that the President has fully considered the fiscal costs of the law in relation to its welfare benefits to our seniors, in deciding to sign it," Olivar said. Happy author Senator Pilar Juliana Cayetano, the measure's principal author, lauded President Arroyo for signing RA 9994. "I wish to express the gratitude of the country’s six million lolos and lolas (elderly) to the President for finally acknowledging the urgency to sign this measure," she said in a text message to reporters. "Thank God she didn’t listen to her financial advisers who were insensitive to the plight of our elderly who have duly paid their dues to society," she added. Cayetano said the signing of the law is a timely relief for the elderly amid the economic crisis. The measure will allow senior citizens to enjoy the full 20 percent discount on the purchase of essential goods and services accorded to them by law. The 20 percent discount was mandated by Republic Act (RA) 7431, which was enacted in 1992, and later expanded via RA 9257 in 2004. RA 9331 or the new VAT law of 2005, however, effectively trimmed the discount to just 8 percent when it raised the tax rate to 12 percent, leading to complaints which legislators said would be rectified once the new law takes effect. Benefits Under the law, the VAT exemption will apply to the medicines and essential medical supplies, accessories and equipment; fees of attending physicians; medical, dental fees and diagnostic and laboratory fees; fares for buses, jeepneys, taxis, AUVs, shuttle services, public railways, domestic air transport and other vessels. It will also be applied when a senior citizen utilizes services in hotels, restaurants and similar establishments; admission fees in cinemas, theaters and other places of culture, leisure and amusement; and funeral and burial services for the death of senior citizens. In addition, senior citizens may also enjoy a five percent discount on their water and electric bills on the condition that the utilities are named under the senior citizen residing in the household, and that the consumption for electricity and water should be below 100 kilowatt-hours and 30 cubic meters per month, respectively. The measure likewise expands the coverage of penalties for establishments that refuse to grant the mandated benefits. Violating establishments including their owners, managers and personnel may be fined a penalty of not less than P10,000 but not more than P50,000, or imprisonment of not less than a month but not more than six months. - with Johanna Camille Sisante and Amita Legaspi/KBK, GMANews.TV
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