Senator Pia S. Cayetano today assured the country’s six million senior citizens that all benefits due them under the Expanded Senior Citizens Act of 2010 (ESCA) are intact amid reports that their supposed “VAT exemption” for electricity and water consumption will be “taken back” by the Bureau of Internal Revenue (BIR) through a new revenue regulation it issued on Monday
“No benefits are being reduced or withdrawn because the supposed VAT exemption for utilities is not part and was never part of ESCA, but it was inadvertently included in the BIR’s Implementing Rules and Regulations (IRR). Clearly, the inclusion of VAT exemption for utilities is erroneous because the IRR cannot expand the provisions of the law,” said Cayetano, a lawyer and principal author of Republic Act 9994
“So there’s nothing to take back because [VAT exemption for utilities] is not included in the Law in the first place. But all existing benefits under ESCA are intact, including VAT exemption for medicines, medical services, transportation, dining places, and others.
“It’s good that BIR is taking the necessary steps to correct its own IRR to prevent any confusion among the implementing agencies, utility companies, and senior citizens themselves.”
She noted that recent news reports gave the false impression that certain benefits under ESCA, particularly VAT exemption for utilities, were being cancelled under BIR Revenue Regulation (RR) No. 8-2010 to avert government losses.
“What the law does entitle seniors to is a five-percent discount on their water and electricity bills under certain conditions,” she clarified.
Under ESCA, the five percent (5%) discount on water and electric bills will be applied, provided that the latter is registered in the name of the senior citizen, and that consumption is below 100 kilowatt-hours of electricity and 30 cubic meters of water a month.
On a related issue, Cayetano noted that the Department of Social Work and Development (DSWD), citing lack of funds, has limited the beneficiaries of the P500 monthly pension under ESCA to indigent senior citizens who are 80 years old and above.
“The pension under ESCA covers all indigent senior citizens, not just those aged 80 years old and above. So we just have to bank on the DSWD’s commitment that it would expand the coverage of the pension soon once the budget needed to fully implement the law is made available,” she concluded.