Cebu City urges pharmacies, restos: Comply with 20% senior citizen discount, excluding VAT

A senior citizen receives her cash assistance from the City Government during a distribution in 2022. | Cebu City News and Information

CEBU CITY, Philippines – Cebu City is urging pharmacies, restaurants, and other establishments to comply with the law by granting a 20 percent discount for senior citizens based on the net price, excluding the 12 percent value-added tax (VAT).

The Office of Senior Citizens Affairs (OSCA) made the call after reports that some businesses were improperly applying the discount, including VAT in their calculations.

According to OSCA administrative staff member Sheryl Blesbitero, most complaints come from pharmacies, where senior citizens are often misled by incorrect computations.

“Daghan kaayog nag lalis ana kay naa’y mga botika nga wala ni-implement ana. Mao na’ng madala ra nila’g ilad-ilad ang mga senior, ilabi na ni’ng mga senior nga dili kamao sa computation,” Blesbitero shared in OSCA’s recent radio program.

Under Republic Act 9994, or the Expanded Senior Citizens Act of 2010, senior citizens are entitled to a 20% discount and VAT exemption on various goods and services. This applies to medicine, medical supplies, transportation, hotel stays, restaurants, recreation centers, and more. To avail these, seniors must present their ID, OSCA booklet, and prescription if necessary.

Improper VAT exemptions

Reports have surfaced that some pharmacies refuse to deduct the 12 percent VAT from purchases and cited “management policy.”

However, Blesbitero stated that more seniors are becoming aware of their rights, due to OSCA’s continuous educational efforts.

READ: OSCA to investigate ‘fake news’ on senior ID replacement

She explained how VAT should be calculated for senior citizen purchases.

For example, for an item priced at P600, VAT is removed by dividing the price by 1.12, bringing the amount down to P535.71. The 20 percent discount is then applied to this VAT-exempt price, resulting in a reduced total amount.

Discounts on basic goods

Blesbitero also noted that senior citizens and persons with disabilities (PWDs) enjoy special discounts on basic necessities and prime commodities (BNPCs).

Through a joint administrative order (JAO) issued by the Department of Trade and Industry, the Department of Agriculture, and the Department of Energy in March 2024, the discount cap increased from P65 to P125 per week.

This new discount cap applies to essential goods such as rice, bread, fish, meat, eggs, and cooking oil, with a weekly purchase cap raised to P2,500, compared to the previous P1,300.

Blesbitero clarified that this special discount is separate from the statutory 20 percent discount that senior citizens already enjoy, and she urged seniors to report any establishments that refuse to honor their privileges.

Compliance

Chito Aragon, executive assistant to City Councilor Pastor “Jun” Alcover Jr., who chairs the city’s Senior Citizens Council, reminded businesses to comply with the law.

The City had earlier warned that it may revoke the business permits of establishments found violating senior citizen discount laws.

Senior citizens encountering issues are encouraged to file complaints with OSCA, which will take the necessary actions against non-compliant establishments.

“Dagop gyud mo sa among opisina kay ato nang ipatawag [ang establishment],” Blesbitero advised. /clorenciana