Sen. Mark Villar pushes tax credits for businesses granting senior, PWD discounts

MANILA, Philippines – Senator Mark Villar is pushing for a measure that seeks to grant tax credits to establishments granting mandatory discounts to senior citizens and persons with disabilities (PWDs), promoting a fairer tax system while ensuring the continued delivery of benefits to these sectors.

Under Senate Bill No. 2494, or the proposed “Tax Credit for Senior Citizens and Persons with Disability Discount Act,” Villar seeks to amend Republic Act No. 9994, or the Expanded Senior Citizens Act of 2010, and Republic Act No. 7277, or the Magna Carta for Persons with Disability.

Under the existing system, businesses cannot necessarily recover the full cost of mandatory discounts through tax deductions, placing additional financial pressure on establishments, particularly micro, small, and medium enterprises (MSMEs).

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“Ang pagbibigay ng diskwento sa ating mga senior citizen at persons with disabilities ay mahalagang bahagi ng ating social protection programs. Ngunit hindi dapat iasa lamang sa mga negosyo ang buong bigat ng pagpapatupad ng mga benepisyong ito. Kailangan nating magkaroon ng mas patas na sistema na nangangalaga sa ating mga benepisyaryo habang tinutulungan din ang ating mga negosyo, lalo na ang mga MSME, na manatiling matatag at makapagpatuloy sa kanilang operasyon,” Villar said.

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The bill proposes to treat mandatory discounts granted to senior citizens and PWDs on qualified goods and services as tax credits instead of tax deductions, allowing establishments to apply the cost of these discounts directly against their national internal revenue tax liabilities.

Tax credits arising from senior citizen discounts may be carried over to succeeding taxable years but would not be refundable or transferable.

The measure also retains the tax deduction mechanism for the minimum five percent discount on qualified monthly water and electricity consumption of senior citizens.

Villar emphasized that the measure aims to balance the protection of senior citizens and PWDs with the need to maintain a viable business environment, recognizing that private establishments play an important role in implementing the discounts mandated by law.

“Ang layunin natin ay matiyak na patuloy na matatanggap ng ating mga senior citizen at PWDs ang mga benepisyong nararapat sa kanila, habang binibigyan din natin ng mas patas na sistema ang mga negosyong nagpapatupad ng mga diskwentong ito. Sa ganitong paraan, napangangalagaan natin ang kapakanan ng ating mga kababayan at napapatibay ang ating mga negosyo bilang katuwang sa pag-unlad ng bansa,” he concluded.