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MANILA, Philippines - The Supreme Court (SC) has upheld the legality of the tax deduction scheme imposed on business establishments under the Senior Citizens Law.
In a 38-page decision penned by Associate Justice Mariano del Castillo, the SC held that the 20 percent discount provided under Section 4 of Republic Act 7432, as amended by RA 9257, is constitutional.
It dismissed the petition filed by funeral firms Manila Memorial Park Inc. and La Funeraria Paz-Sucat Inc. questioning the scheme and its implementing rules by the Department of Social Welfare and Development and the Department of Finance.
“A law, which has been in operation for many years and promotes the welfare of a group accorded special concern by the Constitution, cannot and should not be summarily invalidated on a mere allegation that it reduces the income or gross sales of business establishments,” read the SC ruling.
Under the tax deduction system, private establishments shoulder 65 percent of the discount while the government carries 35 percent.
The petitioners said the scheme violates their right to just compensation under Article III of the Constitution.
They insisted that the government should implement tax credit scheme that would directly reduce taxes collected by the government on businesses granting the 20-percent privilege to senior citizens.
They added that the scheme violates Article XV Section 4, and Article XIII Section 11 of the Constitution as it passes to the private sector the duty of the government to improve the welfare of the elderly.
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