The Supreme Court has upheld the constitutionality of the
20-percent discount and tax deduction scheme for senior citizens imposed
on business establishments.
Voting 13-1, the
high court junked for lack of merit a petition for prohibition filed by
two funeral companies – Manila Memorial Park, Inc. and La Funeraria
Paz-Sucat – questioning the constitutionality of Republic Act 7432, as
amended by RA 9257, that granted senior citizens privileges.
The ruling was written by Associate Justice Mariano del Castillo with
Senior Associate Justice Antonio Carpio being the lone dissenter.
Meanwhile, Associate Justice Arturo Brion did not take part in the
voting.
Thirteen of the 15 SC magistrates are
senior citizens or 60 years old or older, while Chief Justice Maria
Lourdes Sereno is 53 years old. Associate Justice Marvic Leonen will
turn 51 on December 29.
In its ruling, the high
court said both the 20-percent discount and the tax deduction scheme
were a "valid exercise of the police power ofthe state."
"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 justices said.
In
its petition, the two funeral homes clarified that they were contesting
not the legality of the 20-percent discount for senior citizens but of
the tax deduction scheme under the Senior Citizens law, as well as the
implementing rules and regulations issued by the Department of Social Welfare and Development (DSWD) and the Department of Finance (DOF).
According to the petitioners, 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 firms said the tax deduction and the IRR ran contrary to Article III, Section
9 of the 1987 Constitution, which states that: "[p]rivate property
shall not be taken for public use without just compensation."
The memorial homes said because of the tax deduction scheme, the
state's constitutional mandate or duty of improving the welfare of the elderly to the private sector, in violation of Article XV, Section 4 and Article XIII, Section 11 of the Constitution.
In their defense, 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" by their companies.
In its ruling, the SC ruled: "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."
The magistrates said: "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?" — Mark Merueñas/RSJ, GMA News
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