BIR Ruling No. 004-10

May 21, 2010 BIR RULING NO. 004-10 Ireneo P. Tubelleja Poblacion, Gitagum Misamis Oriental Sir : This refers to your letter dated April 27, 2009, indorsed to this Office by Revenue Region 16, requesting, in effect, an opinion on whether you are entitled to a 20% sales discount on the services rendered by a rural electric cooperative. In reply, please be informed that Section 4 of Republic Act (RA) Numbered 9257, otherwise known as the "Expanded Senior Citizens Act of 2003," grants to senior citizens the privilege, among others, of a 20% discount from certain kinds of establishments. In implementing the above provision, Revenue Regulations 4-2006 limits the scope of this privilege as follows: "SECTION 3. Income Tax Benefit and Privileges for the Senior Citizens. Senior citizens shall be entitled to the following tax benefits and privileges: a. . . . b. Twenty percent (20%) discount from all establishments relative to the utilization of services in hotels and similar lodging establishments, restaurants and recreation centers, and purchase of medicines in all establishments for the exclusive use or enjoyment of senior citizens, including funeral and burial services for the death of senior citizens; SEACTH c. Twenty percent (20%) discount on admission fees charged by theaters, cinema houses and concert halls, circuses, carnivals, and other similar places of culture, leisure and amusement for the exclusive use or enjoyment of senior citizens; d. Twenty percent (20%) discount on medical and dental services, professional fees of attending doctors, and diagnostic and laboratory fees such as, but not limited to, x-rays, computerized tomography scans and blood tests, in all private hospitals and medical facilities, in accordance with the rules and regulations to be issued by the Department of Health, in coordination with the Philippine Health Insurance Corporation; e. Twenty percent (20%) discount in fare for domestic air and sea travel for the exclusive use or enjoyment of senior citizens; and f. Twenty percent discount in public railways, skyways and bus fare for the exclusive use and enjoyment of senior citizens." It bears to stress that the foregoing enumeration is exclusive. Such being the case, the 20% discount privilege cannot be availed of by a senior citizen in all kinds of establishments. Thus, only those goods supplied and services rendered by the establishments enumerated under RA 9257, as implemented by the Regulations, are covered by the privilege. Inasmuch as a rural electric cooperative is not one of those establishments enumerated under the law, it is not required to grant a sales discount to senior citizens availing of its services. Accordingly, this Office regrets to inform you that your request for a 20% discount on your purchase of electricity from a rural electric cooperative is hereby denied for lack of legal basis. This ruling is being issued on the basis of the foregoing facts as represented. However, if upon investigation, it will be disclosed that the facts are different, then this ruling shall be considered null and void. CcaDHT Very truly yours, (SGD.) JOEL TAN-TORRES Commissioner of Internal Revenue