Solon urges tax breaks for stores giving bigger discounts to seniors

Asenior lawmaker has once again appealed to the Bureau of internal revenue (Bir), urging them to consider granting tax credits to supermarkets and retail outlets that are obligated to provide price cuts to senior citizens and persons with disabilities (PWDS).

Camarines Sur Rep. Lray Villafuerte emphasized the importance of providing financial relief to small supermarkets and retail stores that are struggling with narrow profit margins. He said that the tax breaks would not only alleviate their financial burden but also ensure greater compliance with the new economic benefits introduced by the House for seniors and PWDS, particularly in light of the rising costs of basic commodities.

As the author of several laws and measures supporting the elderly and solo parents, Villafuerte renewed his appeal to the BIR following the release of revised government rules on special discounts for purchases of basic necessities and prime commodities (BNPCS) by seniors and PWDS. These revisions include doubling the price cuts to 5% and allowing priority Filipinos to receive up to P500 in monthly discounts.

According to Villafuerte, the new policy, outlined in a joint administrative order (JAO) signed on March 21 by the Department of Trade and Industry (DTI) along with the Departments of Agriculture (DA) and Energy (DOE), will increase the maximum weekly price reduction for these priority groups from the current cap of P65 to P125. This adjustment means that seniors and PWDS can now enjoy discounts of up to P500 every month.

Villafuerte stressed the importance of granting tax breaks or deductions to retail outlets that offer price-discounted groceries. He believed that such measures would promote compliance and ensure the effective implementation of the new policy. He also cautioned that the absence of tax credits could lead to potential price hikes or non-compliance by supermarkets, thereby nullifying the discounts for seniors and PWDS.

“The inclusion of price-discounted groceries purchased by our seniors and PWDS in the eligibility for tax breaks or deductions by supermarkets and other establishments will significantly enhance compliance,” Villafuerte said. He added, “Failing to consider granting tax credits to retail outlets increases the likelihood of supermarkets or grocery stores disregarding this policy or increasing the prices of BNPC items to offset the discounts provided to seniors and PWDS.”

Villafuerte emphasized that the full implementation and 100% compliance of supermarkets and retail outlets with this new policy would greatly benefit seniors and PWDS, especially given the recent approval of price increases in approximately 40 BNPC goods, such as instant noodles, soap, and bottled water. He further noted that another 63 stock keeping unit (SKU) items are currently under consideration for proposed increases.

Villafuerte said the draft JAO itself pointed out that the special price discounts for senior citizens and PWDS were “relevant... given the current inflation rate.”

The price discounts are applicable to mostly locally manufactured goods.

The basic necessities covered by the new policy include rice; bread; fresh, dried, and canned fish; fresh pork, beef, and poultry meat; fresh and processed vegetables; instant noodles; coffee; sugar; cooking oil; salt; laundry and detergent soap; household liquefied petroleum gas (LPG); charcoal; and kerosene.

The prime commodities covered include flour; dried, processed, and canned pork, beef, and poultry meat; dairy products; onions and garlic; vinegar; fish sauce or patis and soy sauce; toilet and bath soap; fertilizer and pesticides; feeds for poultry, livestock, and fish; veterinary products; paper and school supplies; cement, plywood, and construction nails.

Villafuerte said the 5% price discounts for BNPC goods are on top of the 20% discount and value added tax (VAT) exemption for seniors and PWDS under R A 9994 and R A 10754, respectively.

Also, the special discounts are on top of the promotional offers of establishments, regardless of whether the establishments have secured permits from the concerned government agencies for their promotions.

These price discounts also cover online purchases.

Acknowledging concerns raised by stakeholders such as the Philippine Amalgamated Supermarkets Association Inc. (PAGASA) and the Philippine Retailers Association (PRA), Villafuerte highlighted the need for state funding mechanisms to support retailers, especially small enterprises, in implementing the higher BNPC discounts without undue burden.

Hereiteratedhiscalltothebir,noting that the draft joint administrative orderdidnotaddressthetaxtreatment of the new BNPC policy. Villafuerte stressed the urgency of resolving this matter to ensure the successful implementation of the enhanced discounts for seniors and PWDS.