Magna Carta for

Senior Citizen and

PWDs

CHAPTER
14
Declaration of Policies and
Objectives
As provided in the Constitution of the Republic
of the Philippines, it is the declared policy of the
State to promote a just and dynamic social order
that will ensure the prosperity and independence of
the nation and free the people from poverty
through policies that provide adequate social
services, promote full employment, a rising standard
of living and an improved quality of life. In the
Declaration of Principles and State Policies in Article
II, Section 10 and 11, it is furthered declared that
the State shall provide social justice in all phases of
national development and that the State values
the dignity of every human person and guarantees
full respect for human rights (RQ 9994).
 "Article XIII, Section 11 of the Constitution
provides that the state shall adopt an integrated
and comprehensive approach to health
development which shall endeavor to make
essential goods, health and other social services
available to all the people at affordable cost. There
shall be priority for the needs of the underprivileged,
sick, elderly, disabled, women and children. Article
XV, Section 4 of the Constitution Further declares
that it is the duty of the family to take care of its
elderly members while the State may design
programs of social security for them.
Definition

Refers to any Filipino Citizen who is a resident of

the Philippines and who is sixty (60) years old or
above. It may apply to senior citizens with dual
citizenships status provided they prove their Filipino
citizenship and have at least six (6) months
residency in the Philippines.
A resident citizen, for the purposes, shall refer to
a Filipino citizen with permanent/legal residence in
the Philippines, and shall include one, who, having
migrated to a foreign country, has returned to the
Philippines with a definite intention to reside therein,
and whose immigrant visa has been surrendered to
the foreign government.
Income Tax of Senior Citizens

Generally, qualified Senior Citizens deriving

returnable income during the taxable year,
whether from compensation or otherwise, are
required to file their income tax returns and pay the
tax as they file the return. However, if the returnable
income of a Senior Citizen is in the nature of
compensation income but he qualifies as a
minimum wage earner under R.A No. 9504, he shall
be exempt from income tax on the said
compensation income subject to the rules provided
under RR10-2008 applicable to minimum wage
earners.
 Therefore, a senior citizen is taxable just like an
ordinary individual taxpayer as discussed in
Chapter 2 of this book, "Income tax for Individual
Taxpayers." However, unlike an ordinary individual
taxpayer, a senior citizen is generally exempt from
value added tax aside from entitlement of 20%
discount on certain purchases of goods and/or
services as provided by law. (Refer to page 584)

Likewise, if the aggregate amount of gross

income earned by the Senior Citizen during the
taxable year does not exceed P250,000 as
provided under RA No. 10963 (TRAIN LAW), he shall
be exempt from income tax and shall not be
required to file income tax return. Hence, a senior
citizen, like an ordinary individual taxpayer, can still
be liable for other taxes discussed in Chapter 2 such
as:
1. The 20% final withholding tax on interest income
from any currency bank deposit

2. The 15% final withholding tax on interest income

from a depository bank under the expanded
foreign currency deposit system (SEC. 24 (B)(1),
NIRC as amended.

3. Pre-termination of long term deposit or investment

under Section 24(B)(1) of the Tax Code:
Four years less than five years 5%
Three years to less than four years 12%
Less than three years 20%
4. The 10% final withholding tax:
• On cash and/or property dividends actually or
constructively received from a domestic
corporation or from a joint stock company,
insurance or mutual fund company and a
regional operating headquarters of a
multinational company; or
• On the share of an individual in the distributable
net income after tax of a partnership (except a
general professional partnership) of which he is a
partner; or
• On the share of an individual in the net income
after tax of an association, a joint account, or a
joint venture or consortium taxable as a
corporation of which he is a member or a co-
venturer Sec. 24(B)(2), Tax Code).
5. The Capital gains tax from sales of shares of stock
not traded in the stock exchange (Sec.24(C), Tax
Code); and

6. The 6% final withholding tax on presumed capital

gains from sale of real property, classified as capital
asset, except capital gains presumed to have been
realized from the sale or disposition of principal
residence (Sec. 24(D), Tax Code).

7. OTHER TAXES. A senior Citizen/PWD shall also be

subject to the following internal revenues taxes,
among others, imposed under the Tax Code:
• Value Added Tax or Other Percentage Taxes. If he
is self employed or engaged in business or
practice of profession, and his gross annual sales
and/or receipts exceeds the revised vat threshold
of P3,000,000 (TRAIN LAW) or such amount to
which this may be adjusted pursuant to Sec.
109(1)(V) of the Tax Code, he shall be subjected
to VAT. Otherwise, he shall be subjected to the 3%
Percentage Tax under Section 116 of the Tax
Code, as amended.
• Donor's Tax on all donations made by a Senior
Citizen during any calendar year, unless exempt
under specific provision of law.
• Estate Tax. In the event of death, the estate of the
Senior Citizen may also be subjected to the estate
tax following the rules enunciated under Title III of
the Tax Code and It's implementing regulations
• Excise tax on certain goods
• Documentary Stamp Tax

Vat, Percentage Taxes, Donor's Tax, Estate Tax,

Documentary Stamp Taxes and Excise Taxes are
discussed in volume 2 - "Transfer and Business
Taxation."
Benefits for Senior Citizens
Senior Citizens, under the law are entitled to the
following benefits (RR 7-2010, as amended)
a) 20% discount and exemption from VAT on
their purchase of specified goods and services
as follows;
1) Medicine and Drug Purchases including
Influenza and pneumococcal vaccines and such
other essential medical supplies, accessories and
equipment.
2) Professional fees of attending physicians in all
private hospitals, medical facilities, outpatient
clinics and home health care service.
3) Professional fees of licensed health workers
providing home health care services in all
private hospitals, medical facilities, outpatient
clinics and home health care services
4) Medical and dental services, diagnostic and
laboratory fees
5) On actual fare for land transportation travel
6) In actual fare for domestic air transport and sea
shipping vessels and the like
7) On the utilization of services in hotels and similar
lodging establishments, restaurants, recreation
centers
8) On admission fees charged by theaters, cinema
houses and concert halls, circuses, carnivals,
and other similar places of culture, leisure and
amusement.
9) On funeral and burial services of senior citizens.
b) Exemption from the payment of the individual
income taxes of senior citizens who are
considered to be minimum wage earners in
accordance with Republic Act No. 9504;
c) The grant of a minimum of five percent (5%)
discount relative to monthly utilization of water
and electricity supplied by the public utilities:
Provided, that the individual meters for the
foregoing utilities are registered in the name of
the senior citizen residing therein: Provided,
further, that the monthly consumption does not
exceed one hundred kilowatt hours (100 kWh) of
electricity and thirty cubic meters (30 m3) of
water: Provided, furthermore, that the privilege is
granted per household regardless of the number
of senior citizen residing therein:
d) Exemption from training fees for socioeconomic
programs;
e) Free medical and dental services, diagnostic and
laboratory fees such as, but not limited to, x-rays
computerized tomography scans and blood tests,
in all government facilities, subject to the
guidelines to be issued by the DOH in
coordination with the Phil Health;
f) The DOH shall administer free vaccination against
the influenza virus and pneumococcal disease for
indigent senior citizen patients;
h) To the extent practicable and feasible, the
continuance of the same benefits and privileges
given by the Government Service Insurance
System (GSIS) and the PAG-IBIG, as the case may
be, as are enjoyed by those in actual service;
i) Retirement benefits of retires from both the
government and the private sector shall be
regularly reviewed to ensure their continuing
responsiveness and sustainability, and to the
extent practicable and feasible, shall be
upgraded to be at par with the current scale
enjoyed by those in actual service;
j) To the extent possible, the government may grant
special discounts in special programs for senior
citizens on purchase of basic commodities,
subject to the guidelines to be issued for the
purpose by the Department of Trade and Industry
(DTI) and the Department of Agriculture (DA);
k) . Provision of express lanes for senior citizens in all
commercial and government establishment; in
the absence thereof, priority shall be given to
them; and
l) Death benefit assistance of minimum of Two
thousand pesos (P2,000) shall be given to the
nearest surviving relative of a deceased senior
citizen which amount shall be subject to
adjustments due to inflation in accordance with
the guidelines to be issued by the DSWD.
Availment of Privileges
In the availment of privileges mentioned above, the senior
citizen, or his/her duly authorized representative, may submit
as proof of his/her entitled thereto any of the following:
• an identification card issued by the Office of the Senior
Citizen Affairs (OSCA) of the place where the senior citizens
resides: Provided, That the identification card issued by the
particular OSCA shall be honored nationwide;
• the passport of the senior citizen concerned; and
• other documents that establish that the senior citizen is a
citizen of the Republic and is at least sixty (60) years of age
as further provided in the implementing rules and
regulations.
In the purchase of goods and services which are on
promotional discount, the senior citizen can avail of the
promotional discount or the discount provided herein,
whichever is higher.
Treatment of discounts granted to
SCs
The establishment may claim the discounts granted
under
subsections (a) and (c) of this section as tax deduction
based on the cost of the goods sold or services
rendered:
Provide, That the cost of the
discount shall be allowed as deduction from gross
income for the same taxable year that the discount is
granted: Provided, further, That the total amount of
the claimed tax deduction net of VAT , if applicable ,
shall be included in their gross sales receipts for tax
purposes and shall be subject to proper
documentation and to the provisions of the National
Internal Revenue Code (NICR) , as amended. "
Government Assistance
a) EMPLOYMENT
Senior citizens, who have the capacity and desire to
work, or be re-employed, shall be provided information and
matching services to enable them to be productive members
of society. Terms of employment shall conform with the
provisions of the Labor Code, as amended, and other laws,
rules and regulations
Additional Compensation Expense
Private entities that will employ senior citizens as
employees, upon the effectively of this Act, shall be entitled to
an additional deduction from their gross income, equivalent
to fifteen percent percent (15%) of the total amount paid as
salaries and wages to senior citizens, subject to the provision
of Section 34 of the NIRC, as amended: Provided, however,
That such employment shall continue for a period at least six
(6) months: Provided, further, That the annual income of the
senior citizen does not exceed the latest poverty threshold as
determined by the National Statistical Coordination Board
(NSCB) of the National Economic and Development Authority
(NEDA) for the year.
 The Department of Labor and Employment
(DOLE), in coordination with other government
agencies such as, but not limited to, the
Technology and Livelihood Resource Center (TLRC)
and the Department of Trade and Industry (DTI),
shall assess, design and implement training
programs that will provide skills and welfare or
livelihood support for senior citizens.

b) EDUCATION
The Department of Education (DepED), the
Technical Education and Skills Development
Authority (TESDA) and the Commission on Higher
Education (CHED), in consultation with
nongovernmental organizations (NGOs) and
people's organizations (POs) for senior citizens, shall
institute programs that will ensure access to formal
and non-formal education
c) HEALTH
The DOH, in coordination with local government
units (LGUs) , NGOs and POs for senior citizens, shall
institute a national health program and shall provide an
integrated health service for senior citizens. It shall train
community-based health workers among senior citizens
and health personnel to specialize in the geriatric care
health problems of senior citizens. The national health
program for senior citizens shall, among others, be
harmonized with the National Prevention of Blindness
Program of the DOH. Throughout the country, there shall
be established a "senior citizens' ward" in every
government hospital. This geriatric ward shall be
confinement by reason of their health conditions.
However, when urgency for emergency purposes so
require, such geriatric ward may be uses for emergency
purposes, after which, such "senior citizens' ward" shall
be reverted to its nature as geriatric ward.
d) SOCIAL SERVICES
Aleast fifty percent (50%) discount shall be
granted on the consumption of electricity, water,
and telephone by the senior citizens center and
residential care/group homes that are government-
run or non-stock, non-profit domestic corporation
organized and operated primarily for the purpose
of promoting the well-being of abandoned,
neglected, unattached, or homeless senior citizens,
subject to the guidelines formulated by the DSWD.

• self and social enhancement services" which

provide senior citizens opporunities' for socializing,
creative expression, and self improvement;
• after care and follow-up services" for citizens who
are discharged from the homes or institutions for
the aged, especially those who have problems of
reintegration with family and community, wherein
both the senior citizens and their families are
provided with counseling;
• neighborhood support services" wherein the
community or family members provide caregiving
services to their frail, sick or bedridden senior
citizens; and
• substitute family care " in the form of residential
care or group homes for the abandoned,
neglected, unattached or homeless senior
citizens and those incapable of self-care.
e) HOUSING
The national government shall include in its national
shelter program the special housing needs of senior citizens,
such as establishments of housing units for the elderly.

f) ACCESS TO PUBLIC TRANSPORT

The Department of Transportation and Communications
(DOTC) shall develop a program to assist senior citizens to fully
gain access to public transport facilities.

g) INCENTIVE FOR FOSTER CARE

The government shall provide incentives to individuals or
nongovernmental institutions caring for or establishing homes,
residential communities or retirement villages solely for, senior
citizens, as follows:
1. realty tax holiday for the first five (5) years starting from
the first year of operation; and
2. Priority in the construction or maintenance of provincial or
municipal roads leading to the foresaid home, residential
community or retirement village.
ADDITIONAL GOVERNMENT
ASSISTANCE
1. Social Pension
Indigent senior citizen shall be entitled to a monthly
stipend amounting to Five hundred pesos (Php500.00)
to augment the daily subsistence and other medical
needs of senior citizen, subject to a review every two
(2) years by Congress, in consultation with the DSWD.

2. Mandatory Phil Health Coverage

All indigent senior citizens shall be covered by the
national health insurance program of Phil Health. The
LGUs where the indigent senior citizens resides shall
allocate the necessary funds to ensure the enrollment
of their indigent senior citizens in accordance with the
pertinent laws and regulations.
3. Social Safety Net
Social safety assistance intended to cushion
the effect of economics shocks disasters and
calamities shall be available for senior citizens. The
social safety assistance which shall include, but not
limited to, food, medicines and financial assistance
for domicile repair, shall be source from the
disaster/calamity funds of LGUs where the senior
citizens reside, subject to the guidelines to be issued
by DSWD.
The office for Senior Citizens Affair
(OSCA)
There shall be established in all cities and
municipalities an OSCA to be headed by a senior
citizen who shall be appointed by the mayor for a
term of three (3) years without reappointment but
without prejudice to an extension if exigency so
requires. Said appointee shall be chosen from a list
of three (3) nominees as recommended by a
general assembly of senior citizens organizations in
the city or municipality.

"The head of the OSCA shall be appointed to

serve the interest of senior citizens and shall not be
removed or replaced except for reasons of death,
permanent disability or ineffective performance of
his duties to the detriment of fellow senior citizens."
 "The heads of the OSCA shall be entitled to
received an honorarium of an amount at least
equivalent to Salary Grade 10 to be approved by
LGU concerned"

"The head of the OSCA shall be assisted by the

City Social Welfare and Development officer or by
the Municipal Social Welfare and Development
officer, in coordination with the Social Welfare and
Development office.“

The office of the Mayor shall exercise supervision

over the OSCA relative to their plans, activities and
programs for senior citizens. The OSCA shall work
together and establish linkages with accredited
NGOs Pos and the barangays in their respective
areas.
Treatment of Input vat attributable
to sale to a SC
The input tax attributable to the vat exempt sale is
considered as cost or an expense account by
business establishment and shall not be allowed as
input tax credit. If there is no name of SC or ID No.
Indicated in the records of sales, the input tax
attributable to the vat exempt sale claimed by
establishment shall be disallowed.
PERSONS WITH DISABILITY (PWD)

(RA7277- Magna Carta for PWD as amended under

RA 9442 and RA 10754)

A person with disability shall refer to an

individual suffering from restriction or different
abilities, as a result of mental, physical or sensory
impairment to perform an activity in a manner or
within the range considered normal for human
being (RR 1-2009).
Income Tax of PWD
A PWD is taxable just like a Senior Citizen and ordinary
individual taxpayer discussed in Chapter 2.Therefore, a PWD
deriving returnable income during the taxable year, whether
from compensation or otherwise , are required to file their
income tax returns and pay the tax as they file the return.
However , if the returnable income of a PWD is in the nature of
compensation income but he qualifies as a minimum wage
earner under RA No.9504, he shall be exempt from income tax
on the said compensation income subject to the rules provided
under RR10-2008 applicable to minimum wage earners.

Other taxes described in page 583 of this chapter shall

likewise apply to a PWD. However, just like a Senior Citizen, A
PWD is generally exempt from value added tax aside from
entitlement of 20% discount on certain purchases of goods and
/ or senior as provided by law.
PWDs shall be entitled to the
following BENEFITS AND PRIVILEGES
under RA. No10754
a) At least twenty percent(20%) discount and
exemption from the value added tax (VAT),if
applicable, on the following sale of goods and
services for the exclusive use and enjoyment or
availment of the PWD;
"(1)On the fees and charges relative to the
utilization of all services in hotels and similar lodging
establishment; restaurants and recreation centers;
"(2)On admission fees charged by theaters, cinema
houses, concert halls, circuses, carnivals and other
similar places of culture, leisure and amusement;
"(3)On the purchase of medicines in all drugstore;
 "(4)On medical and dental services including
diagnostic and laboratory fees such as, but not
limited to, x-rays , computerized tomography
scans blood test, and professional fees of
attending doctors in all government facilities,
subject to be issued by the Department of Health
(DOH),in coordination with the Philippine Health
Insurance Corporation (Phil Health);
"(5)On medical and dental services including
diagnostic and laboratory fees, and professional
fees of attending doctors in all private hospitals
and medical facilities, in accordance with the
rules and regulations to be issued by the DOH , in
coordination with Phil Health;
 "(5)On medical and dental services including
diagnostic and laboratory fees, and professional
fees of attending doctors in all private hospitals
and medical facilities, in accordance with the
rules and regulations to be issued by the DOH , in
coordination with Phil Health;
"(6) On fare for domestic air and sea travel;
"(7) On actual fare for land transportation travel
such as, but not limited to ,public utility buses or
jeepneys (PUBs/PUJs),taxis ,Asian utility vehicles
(AUVs),shuttle services and public railways
,including light Rail Transit (LRT),Metro Rail Transit
(MRT) and Philippine National Railways (PNR); and
"(8) On funeral and burial services for the death of
the PWD; Provided, That the beneficiary or any
person who shall shoulder the funeral and burial
expenses of the deceased PWD upon
presentation of the death certificate. Such
expenses shall cover the purchase of casket or
urn, embalming, hospital morgue, transport of the
body to intended burial site in the place of origin,
but shall exclude obituary publication and the
cost of the memorial lot.
b) Education assistance to PWD, for them to pursue
primary, secondary, tertiary, post tertiary, as well
as vocational or technical education, in both
public and private schools, through the provisions
of scholarships, grants ,financial aids, subsidies
and other incentives to qualified PWD, Including
support for books, learning materials, and uniform
allowance to the extent feasible: Provided, That
PWD shall meet the minimum admission
requirements;
c) To the extent practicable and feasible, the
continuance of the same benefits and privileges
given by the Government Service Insurance
System (GSIS), Social Security System (SSS); and
Pag-IBIG ,as the case may be ,as are enjoyed by
those in actual services ;
d) To the extent possible , the Government may
grant special discounts in special programs for
PWD on purchase of basic commodities ,subject
to the guidelines to be issued for the purpose by
the Department of Trade and Industry (DTI) and
the Department of Agriculture (DA) ; and
e) Provision of express lanes for PWD in all
commercial and government establishment; in
the absence thereof, priority shall be given to
them. "The above mentioned privileges are
available only to PWD who ate Filipino citizens
upon submission of any of the following as proof
of his/her entitlement thereto:
"(I) An identification card issued by the city or
municipal mayor or the barangay captain of
the place where the PWD resides;
 "(ii) The passport of the PWD concerned; or
“(iii) Transportation discount fare Identification
Card (ID) issued by the National Council for the
Welfare of Disabled Persons (NCWDP).

"The privileges may not be claimed of the PWD

claims a higher discount as may be granted by
the commercial establishment and/or under
other existing laws or in combination with other
discount program/s.
Treatment of Discount granted to
PWDs
"The establishments may claim the discount
granted in subsection (a), paragraphs (1), (2), (3),
(5), (6), (7), and (8) as tax deduction based on the
net cost of the goods sold or service rendered:
Provided, however, That the cost of the discount
shall be allowed as deduction from the gross
income for the same taxable year that the discount
is granted: provided, further, That the total amount
of the claimed tax deduction net of value-added
tax, if applicable, shall be included in their sales tax
receipts for tax purpose and shall be subject to
proper documentation and to the provisions of the
National Internal Revenue Code (NIRC), as
amended.
Additional Compensation Expense

Private entities they employs disabled persons

who meet the required skill or qualifications, either
as regular employee, apprentice or learner, shall
be entitled to an additional deduction form their
gross income equivalent to 25%of the total amount
paid as salaries and wages to disable persons.
Treatment of Input vat attributable
to sale to a PWD
The input tax attributable the vat exempt sale is
considered as cost of an expense account by
business establishments and shall not be allowed as
input tax credit. If there is no name of PWD or ID No.
indicated in the records of sales, the input tax
attributed to the vat exempt sale claimed by
establishment shall be disallowed.
Invoicing Requirement

The business establishment giving sales

discount to PWD is required to keep a
separate and accurate records of sales,
which shall include the name of the person
with disability, PWD ID No., gross
sales/receipts, sales discounts granted, date
of transactions and invoice number for
every sales transaction to a PWD.
Additional Exemption for Individuals
caring for PWDs (RR 5-2017)
Prior to January 1, 2018 or before the
effectivity to the TRAIN Law, a benefactor of a
Qualified PWD, may claim additional
exemption of P25,000 as discussed in Chapter 2,
for each PWD, if such PWD, regardless of age,
satisfies all of the following:
• Filipino citizen;
• within the fourth (4th) civil degree of
consanguinity or affinity to the
taxpayer/benefactor;
• not gainfully employed; and
• chiefly dependent upon living with the
taxpayer/benefactor.
DEFINITION OF TERMS AS PROVIDED
FOR UNDER RR 55-2017
"Person with Disability(PWD)"
PWDs are those who have long-term physical
mental intellectual or sensory impairments which in
interaction will various barriers may hinder their full
and effective participation in society on an equal
basis with others. Persons with disability shall be
further classified/categorized by the Department of
Health (DOH).
"Benefactor"
Benefactor shall refer to the a Filipino citizen or
resident alien, caring for, giving chief support, and
living with PWD, who is in fourth (4th) civil degree of
consanguinity or affinity claiming such PWD as
dependent.
DOCUMENTARY REQUIREMENTS:

The taxpayer/benefactor of a PWD shall submit

the following documentary requirements to the
Revenue District Office (RDO) where he is registered
in order to claim additional exemption, for the first
year of claiming the exemption and after three (3)
years or upon renewal of the PWD ID whichever
comes first:
• Duly accomplished BIR Form 2305
• Photocopy of PWD ID issued by the Persons with
Disability Affairs Office (PDAO) or the city/municipal
Social Welfare Development Office (C/MSWDO) of
the place the person with disability resides or the
National Council on Disability Affairs (NCDA).
END