BIR Ruling No. 231-14

June 25, 2014 BIR RULING NO. 231-14 R.A. No. 9994; IRR of RA 9994; RR No. 7-2010 Edgardo S. Raymundo 007 Tupas Street, San Pedro, Morong Rizal Gentlemen : This refers to your letter dated 20 October 2012 received by this office on 3 September 2013 inquiring on the proper interpretation of Section 5, No. 2 of Revenue Regulations No. 7-2010 particularly on whether or not the five percent (5%) discount for senior citizens mandated by law to public utilities applies when the consumption of water exceeds thirty cubic meters (30 m 3 ) of water or one hundred kilowatt (100 kwh) of electricity. In reply, please be informed that Section 4 (c) of Republic Act No. 7432, as amended by Republic Act No. 9994 states: (c) the grant of a minimum of five percent (5%) discount relative to the monthly utilization of water and electricity supplied by 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 m 3 ) of water: Provided, furthermore, That the privilege is granted per household regardless of the number of senior citizens residing therein; Moreover, Article 12, Section 1 of the Implementing Rules and Regulations of Republic Act No. 9994, otherwise known as the "Expanded Senior Citizens Act of 2010" states: ART. 12. Utility Discounts. SEC. 1. Five (5%) Discount. The grant of a minimum of five percent (5%) discount relative to the monthly utilization of water and electricity by households with senior citizens; 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 m 3 ) of water: Provided, furthermore, that the privilege is granted per household regardless of the number of senior citizens residing therein. To avail of the discount under this Section, the senior citizen shall: 1) Apply for the discount personally or thru a representative. There shall be annual renewal of application to the utility provider. 2) Submit requirements: a) Proof of age and citizenship b) Proof of billing. Meter registration should be in the name of the senior citizen for a period of one year c) Proof of residence TcHCDI Likewise, Section 5 of Revenue Regulations No. 7-2010 provides: SEC. 5. Special Discount Granted to Senior Citizens and Senior Citizens Centers. The monthly utilization of water and electricity by the Senior Citizen supplied by public utilities will be subject to a five percent (5%) discount upon concurrence of the following: 1) the individual meters for the said utilities are registered in the name of the Senior Citizen residing therein; 2) the monthly consumption does not exceed one hundred kilowatt hours (100 kwh) of electricity and thirty cubic meters (30 m 3 ) of water; and 3) the privilege is granted per household regardless of the number of Senior Citizens residing therein. For the consumption of water, electricity and telephone, there shall be granted by public utilities a discount of at least fifty (50%) per cent on the consumption by a Senior Citizens Center and residential care/group homes that are run by the Government or by a 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 Department of Social Welfare and Development (DSWD). Provisions of Section 4 and the foregoing paragraphs of this Section, notwithstanding, if any of the foregoing goods or services is offered by the establishment at a promotional discount, the discount that shall be granted to the Senior Citizen shall be the promotional discount or the minimum discount prescribed in this Regulation. This means that, in no case shall the discount granted to Senior Citizens be less than 20%, or in the case of water and electricity supplied by public utility companies, be less than 5%. The minimum discount shall not be treated as an addition to the promotional discount, provided that, if the promotional discount is less than the minimum discount prescribed in the Act for Senior Citizens, the seller shall increase the discount to meet the said minimum discount prescribed for Senior Citizens. Clearly, under the foregoing, the senior citizen shall not be entitled to five percent (5%) discount from public utilities if the preconditions for the grant of said discount are not met ( i.e. , the monthly consumption exceeds thirty cubic meters (30 m 3 ) of water or one hundred kilowatt (100 kwh) of electricity in a month). The statement of the law is clear and unambiguous hence, it does not need further interpretation. acCTSE Please be guided accordingly. Very truly yours, (SGD.) KIM S. JACINTO-HENARES Commissioner Bureau of Internal Revenue