Republic Act 9994 or the Expanded Senior Citizens Act of 2010 has been in full effect for over 10 years now, providing the elderly a comprehensive range of benefits. One of the perks that’s used quite a lot is the ability to get a 20 percent discount on food items purchased and VAT exemption in restaurants and groceries. Although resources for the law are accessible, more questions have risen during the COVID-19 pandemic, especially with the popularity of online food sellers. And along with it, reports of abuse and confusion on both sides of the spectrum.
We spoke to Atty. Gelina Rose Recio-Arugay, senior associate at Follosco Morallos & Herce, to clarify some of the questions we’ve received on our social media pages and shed light on how this particular privilege works during a time like the pandemic.
Does the senior citizen discount apply to online or home food businesses too?
According to the law’s Implementing Rules and Regulations (IRR), the senior citizen discount applies only to restaurants, which is defined as “any establishment duly licensed and with business permits issued by the local government units, offering to the public, regular and special meals or menu, fast food, cooked food and short orders.” The Bureau of Internal Revenue also adds that a restaurant includes “such eating places [that] may also serve coffee, beverages and drinks.”
So, if these online food businesses are duly licensed and have the necessary local business permits to operate, then it is considered a restaurant. As such, the senior citizen discount must be applied.
Can restaurants or online food sellers give a fixed amount for a senior citizen’s discount?
No, as doing so would be a violation of the IRR of RA 9994 and the BIR’s Revenue Regulations 07-2010 (RR 07-10). It should always be 20 percent of the food item(s) or meal(s) bought by the senior citizen.
The following are considered violations under Rule VII, Article 23 of the IRR:
- Pegging a maximum amount of food purchase subject to 20% discount and the VAT exemption, and/or posting of notice to that effect;
- Refusal to grant the 20 percent discount and VAT exemption on takeout/take-home/drive-thru orders, it appearing that the purchase is for the exclusive use and enjoyment of senior citizens;
- Refusal to grant a discount for credit card payments, subject to Article 8 of the IRR; and
- Refusal to grant a 20% discount and VAT exemption on delivery orders, it appearing that the purchase is for the exclusive use and enjoyment of senior citizens.
If these online food businesses are duly licensed and have the necessary local business permits to operate, then it is considered a restaurant. As such, the senior citizen discount must be applied.
During the pandemic, are seniors required to personally appear and show their senior citizen IDs to avail of the discount?
Yes, the seniors have to be present and must present his/her senior citizen ID in the food establishment to get the discount. No proxies or authorization in favor of another person who is not a senior will be honored in dine-in services. For takeout, take-home or drive-thru orders, the discount will still apply as long as it’s the senior who’s placing the order.
If you’re having food delivered, make sure that you provide the senior citizen ID card number while making the orders and that the ID is shown upon delivery to verify the identity of the senior.
If a restaurant’s promo is not on food but on the delivery fee, can the senior citizen discount still be availed?
If the establishment is offering a promotional discount on the purchase of food, then a senior is entitled to avail of either:
- The establishment’s offered promo
- The 20 percent senior citizen’s discount, whichever is higher
For instance, if a restaurant is offering a 30 percent discount on the meals offered, then a senior ordering the discounted food will no longer be entitled to the senior citizen’s discount.
In terms of applying the discount on delivery fees, if the delivery charge is not billed separately, then it is covered by the 20 percent discount.
So, if the restaurant is offering a promo on the delivery charge and it is identified as a separate component from the price of the food ordered, then a senior can avail of the 20 percent discount on the net retail price of the food ordered.
If the restaurant is offering a promo on the delivery charge and it is identified as a separate component from the price of the food ordered, then a senior can avail of the 20 percent discount on the net retail price of the food ordered.
I have a small restaurant business and one senior citizen bought food from us and we gave him a 20 percent discount. But he also asked that his food be exempted from VAT. Can you please enlighten me on this?
Under RA 9994 and its IRR, seniors are also entitled to VAT exemption, in addition to the 20 percent discount on the sale of goods and services as listed in the law. This includes food, drinks, and other consumable items sold by restaurants. In this case, you should also preclude from billing any VAT to the senior.
Some groceries do not include all types of instant coffee. Is the law clear on what types of coffee are included, especially the high-end ones?
There’s no distinction made in the law regarding the types of coffee that would be considered as basic necessities. “Coffee and creamer” is simply included as one of the goods classified as “basic necessities” under Joint DTI-DA Administrative Order (JAO) No. 10-02, Series of 20201, as amended, entitled “Grant of Special Discounts to Senior Citizens on the Purchase of Basic Necessities and Prime Commodities.”
In order to avail the 5 percent special discount [on] retail prices [of] certain grocery items, the instant coffee must be purchased from a retailer. Retailers include supermarkets, grocery stores, convenience and mini-convenience stores. The only establishments exempted from this particular discount are the following:
- Food court stalls
- Food carts
- Food vendors
- Sari-sari stores with capitalization of less than P100,000.00
- Public and private wet markets
- Talipapa
- Cooperative stores
Where do we submit complaints if the senior citizen is from Manila, for example, and the violating establishment is from a different city?
You can file a complaint directly to the Office for Senior Citizens Affairs, which is under the Mayor’s Office, in the city or municipality where the violating establishment is located.