Computing For Senior Citizen’s Discount
As a new holder of senior citizen’s card, I noticed the difference on how business establishments compute the discounts on the purchases I made in the last three (3) months that I have used the privilege. I had no problems with the big name establishments like Jollibee, KFC, Mercury Drug and the like. Their point-of-sales (POS) terminals are programmed to handle the discounts on purchases by senior citizens.
When the privilege was first granted under Republic Act No. 7432, as amended by Republic Act No. 9257, otherwise known as the “Expanded Senior Citizens Act of 2003“, computing for the senior citizen’s discount was very simple. The business establishment just had to deduct twenty (20%) from the selling price of the goods subject to discount. However, when the 12% value-added tax (VAT) was imposed sometime in 2005, the 20% senior citizen’s discount was watered down to 8% so our legislators again amended the law to become“Expanded Senior Citizens Act of 2010” or Republic Act No. 9994.
Under Republic Act No. 9994, the grant of twenty percent (20%) discount and exemption from the value -added tax (VAT) was imposed on the sale of goods and services subject to such privilege for the exclusive use and enjoyment or availment of the senior citizen (SC). This provision causes some confusion in computing for senior citizen’s discounts. In view of this, let me present how to correctly compute the figure based on the search and information from some people knowledgeable on the matter.
Let us say that the price of the goods that the senior citizen wanted to avail and subject to discount is PhP100. The selling price (SP) includes 12% VAT and 20% discount shall apply. Computation for the net amount that the senior citizen must pay will be as follows:
A) The amount of VAT must first be computed according to the formula –
Amount of VAT = (Selling Price x 12%)/1.12 = (PhP100 x 0.12)/1.12 = PhP12/1.12 = PhP10.71
B) Next step is to deduct the Amount of VAT from the Selling Price to get the Sales Net of VAT as follows:
Sales Net of VAT = Selling Price – Amount of VAT = PhP100 – 10.71 = PhP89.29
C) The amount of discount is the next to be computed and this is done as shown below:
Amount of Discount = Sales Net of VAT x 20% = PhP89.29 x 0.20 = PhP17.86
D) Last step to arrive at the amount that the senior citizen must pay is to deduct the amount of discount from the Sales Net of VAT as follows:
Amount To Be Paid By SC = Sales Net of VAT – Amount of Discount = PhP89.29 – 17.86 = PhP71.43
From the above computations, it can be easily seen that the total amount deducted from the selling price to arrive at the amount to be paid by the senior citizen equaled to PhP28.57 (PhP10.71 VAT + PhP17.86 Discount). Translated to percentage of selling price, (PhP28.57/PhP100 x 100%), it can be concluded that the senior citizen is entitled to 28.57% deduction on the selling price of goods covered by RA 9994. If you would like to know more about discounts and bonuses you can check out this site and learn all about cash app referral code.
Still, it’s not enough. .Whatever discounts they gave to our beloved senior citizens. unless they will increase the benefits. It’s the only time to say they treasure seniors. .
hope in my senior years, it would already be 50%. (dream on!) lol
Wow what a computation! I think that senior citizens must truly get more discounts since they are enjoying the last of their lives. They have struggled long enough and are now deserving to win some benefits.
Reminds me to secure my own fund for my old age. I really hope the government can do more for our senior citizens.
Thanks for enlighten me here sir.. I hope government should find a way to improve or add another benefits for senior citizens.
My father has several maintenance medications and hi Senior Citizens card really helps.
Aside from the discount, some cities give their senior citizens allowances and feebies like free movie tickets 🙂
Unless you’re the one giving the discount, beneficiaries of this discount shouldn’t need to be bothered with the computation, right? Haha. Poor grandma, if that’s the case.
Why not? As a consumer, I believe even senior citizens must assert their right to get the correct discounts. As I said in the blog, don’t worry about the big name merchants but for others, one is better off making his own computations.
Sad fact is that only 2% of the total number of elderly people is financially stable. Most rely on pensions and discounts which I think is not enough
I am quite convinced that the benefits are still not enough. They can give more than that!
We just have to believe in what the government is doing to protect and offer aid to the senior citizen. 🙂
I cringed to see arrogant sales people or even government workers who give less attention to our seniors. Yes a bigger discount for them but the incentives or benefits are too minimal. I really feel with those feeble knees.