Revenue Memorandum Circular-38-2012

Frequently Asked Questions

Q11. For call-in/phone-in orders, what are the rules?

A11.Called-in or phoned-in orders are actually delivery orders entitled to 20% discount and VAT exemption. Hence, they are likewise subject to certain conditions; i.e. senior citizen ID card number must be given while making the order over the telephone; the senior citizen ID card must also be presented upon delivery to verify the identity of the senior citizen entitled to the 20% discount and VAT exemption.

In case of called-in or phoned-in orders of grouped meals, the food establishment must determine the number of senior citizens composing the group and the 20% percent discount shall be computed based on the value of the food attributable to the qualified senior citizens. Likewise, the senior citizen ID card number/s must be given while making the order over the telephone and the senior citizen ID card/s must be presented upon delivery to verify the identity of the senior citizen/s entitled to the 20% discount and VAT exemption. (Rule IV, Article 7, Section 3(g) of the Rules and Regulations implementing RA No. 9994; Section 6 of RR No. 7-2010).

Q12. Is the purchase of a whole cake subject to 20% discount?

A12.A purchase of a whole cake may be considered as a purchase of a “group meal or meal for sharing.” For instance, if the whole cake purchased is good for five (5) persons, and the group of diners is composed of five (5) Senior Citizens, each with a valid Senior Citizen’s ID card, then they shall be entitled to the 20% discount or the entire food purchase shall be entitled to the 20% discount. If the group of diners is composed of Senior Citizens, but not all have their valid Senior Citizen’s ID card, or composed of Senior Citizens and Non-Senior Citizens, the value of the cake attributable to the qualified Senior Citizen/s shall be computed in accordance with the formula set forth in A1 of this Circular.

If a Senior Citizen purchases a slice of cake or a personal serving of cake, he shall be entitled to the 20% discount.

Q13. What is the rule on the purchase of double/family pizza by a Senior Citizen?

A13.Pizza orders may be considered as purchases of “group meal or meal for sharing”. For instance, if the pizza order is good for three (3) persons, and the group of diners is composed of three (3) Senior Citizens, each with a valid Senior Citizen’s ID card, then they shall be entitled to the 20% discount or the entire food purchase shall be entitled to the 20% discount. If the group of diners is composed of Senior Citizens, but not all have their valid Senior Citizen’s ID cards, or composed of Senior Citizens and Non-Senior Citizens, the value of the pizza attributable to the qualified Senior Citizen’s shall be computed in accordance with the formula set forth in A1 of this Circular.

If a Senior Citizen purchases personal serving of pizza, he shall be entitled to the 20% discount.

Q14. What is the rule on the purchase of alcoholic products such as beer, wine, and other liquors? Are they considered “drinks” entitled to the 20% discount and VAT exemption?

A14.Generally, alcoholic beverages are not subject to the 20% discount and VAT exemption especially if purchased “in bulk”, “in buckets” or “in cases”. However, if served as a single serving drink, its purchase by a Senior Citizen is entitled to the 20% discount and VAT exemption.

However, alcoholic beverages purchased in a bar, club or cabaret are exempt from VAT but subject to amusement tax of 18% under Section 125 of the NIRC, as amended. A Senior Citizen may still avail of the 20% discount on the purchase of an alcoholic drink but the discount shall be limited only to a single serving of an alcoholic beverage.

Q15. Are cigars and cigarettes considered “consumables” subject to the 20% discount?

A15.Cigarettes/cigars are not the food or essential items deemed subject to the 20% discount.

It must be emphasized that one of the objectives of RA No. 9994 is to promote the health and benefits of the elderly. Thus, the State adopted an integrated and comprehensive approach to health development which endeavours to make essential goods, health and other social services available to the elderly people at affordable costs. Cigars and cigarettes, although considered consumables, are not essential goods and are considered hazardous to the health of the Senior Citizens.

Q16. If medicine is bought in a grocery, supermarket, or convenience store, is it subject to the 20% discount and VAT exemption?

A16.Yes. The 20% discount and VAT exemption privilege shall also apply to medicines purchased from drug stores, hospital pharmacies, medical and optical clinics and similar establishments including non-traditional outlets dispensing medicines. (Rule IV, Article 7, Section 1(b) of the Rules and Regulations implementing RA No. 9994, Section 6 of RR No. 7-2010).

Q17.Are delivery fees/charges for delivery orders subject to the 20% discount?

A17.A distinction must be made. If the delivery fee/charge is not billed separately, it is subject to the 20% discount. However, if such delivery fee/charge is billed separately, it is not entitled to the 20% discount and is subject to VAT. (Section 6 of RR No. 7-2010)

Q18.Are toll fees subject to the 20% discount?

A18.No, toll fees are not the same as “fares”. Hence, it is not subject to the 20% Senior Citizen Discount.

Q19. Are taxi fares subject to the 20% discount?

A19.Yes, taxi fares are subject to the 20% Senior Citizen Discount. The Land Transportation and Franchising Regulatory Board (LTFRB) has issued a guideline on this matter.

Q20. In the case of purchase of goods and services which are on promotional discount, e.g. discounted sale upon use of a membership/ privilege card, may the Senior Citizen still avail of the 20% Discount?

A20.No. In the purchase of goods and services which are on promotional discount, the Senior Citizen shall avail of either the promotional discount or the 20% discount, whichever is higher. However, the discount that must be given to the Senior Citizen shall in no case be less than 20%. (Section 5 of RR No. 7-2010)