Senior Citizens’ 20% Discount, Tax Deduction Scheme, Constitutional – SC

Voting 13-1, the Supreme Court upheld the legality of the 20-percent discount and the tax deduction scheme for senior citizens, by saying the law is constitutional.

The decision was penned by Associate Justice Mariano del Castillo. Dissenting to such ruling was Senior Associate Justice Antonio Carpio. Justice Carpio, in its dissenting opinion ruled that private establishment should be allowed to claim the 20% discount granted to senior citizens as tax credit.

Associate Justice Arturo Brion did not take part in the voting.

The Supreme Court junked the petition for prohibition filed by Manila Memorial Park, Inc. and La Funeraria Paz-Sucat for lack of merit.

The two funeral companies earlier filed a petition questioning the constitutionality of Republic Act 7432, as amended by RA 9257, that granted senior citizens the said privileges.

The High Court’s ruling said both the 20-percent discount and the tax deduction scheme were a “valid exercise of the police power of the state.”

It added that “There is no intention to say that price and rate of return on investment control laws are the justification for the senior citizen discount law. Not at all.”

The two funeral homes clarified in its petition that they were not contesting the legality of the 20 % discount for senior citizens but the tax deduction scheme under the Senior Citizens law.

They also questioned the implementing rules and regulations (IRR) issued by the Department of Social Welfare and Development (DSWD) and the Department of Finance (DOF).

On the other hand, the DSWD and the DOF said the petitioners failed to prove that the tax deduction scheme was not “fair and full equivalent of the loss sustained.”

Petitioners claimed that under the tax deduction scheme, the private sectors shoulder 65% of the discount because only 35% of it is actually returned by the government to the companies.

The two companies said the tax deduction including the IRR are contrary to Article III, Section 9 of the 1987 Constitution, which provides that “[p]rivate property shall not be taken for public use without just compensation.”

Petitioners also added that because of the tax deduction scheme, the state’s constitutional mandate of improving the welfare of the elderly shifts to the private sector, which is in violation of Article XV, Section 4 and Article XIII, Section 11 of the Constitution.

In the ruling, the Supreme Court ruled that “The justification for the senior citizen discount law is the plenary powers of Congress. The legislative power to regulate business establishment is broad and covers a wide array of areas and subjects.”

“It is well within Congress’ legislative powers to regulate the profits or income/gross sales of industries and enterprises, even those without franchises. For what are franchises but mere legislative enactments?” the High Court said.

Thirteen of the 15 Supreme Court justices are senior citizens or 60 years old and above. Chief Justice Maria Lourdes Sereno is 53 years old.
Source: Gma News Online
Supreme Court