Dear PAO,

I gave my 72-year-old grandmother a gift check, which I bought from a hotel and was worth P7,000. When my grandmother was about to use it, the hotel management told her that she had to pay the balance between the published room rate of P8,000 and the value of the gift check. My grandmother was informed that she could not be granted the senior citizen discount because such a benefit does not apply when the mode of payment is through a gift check. I would like to know if that policy is correct.

Sylvia

Dear Sylvia,

Please be informed that Sections 4 (a) and 8 of Republic Act 10962, otherwise known as the “Gift Check Act of 2017,” provide that:

“SEC. 4. Definition of Terms.- As referred to in this Act,

“(a) Gift Check, also referred to as Gift Certificate or Gift Card, is any instrument issued to any person, natural or juridical, for monetary consideration, honored upon presentation at a single merchant or an affiliated group of merchants as payment for consumer goods or services. The instrument may be in the form of paper, card, code, or other device, and shall remain valid until the cessation of business of the issuer. xxx

“SEC. 8. Applicability to Promotional Programs, Warranties, Return Policies, and Senior Citizens and Persons with Disability Discounts.- Promotional sales activities, loyalty programs, warranties, return policies for cash purchases, and discounts for senior citizens and persons with disability, as provided for under the relevant laws and rules and regulations, shall apply likewise to purchases of goods and services that are paid for with gift checks. xxx”

Relative thereto, Section 4 (a) (7) of Republic Act 7432, as amended by Republic Act 9994, otherwise known as the “Expanded Senior Citizens Act of 2010”, provides that:

“SEC. 4. Privileges for the Senior Citizens. – The senior citizens shall be entitled to the following:

“(a) the grant of twenty percent (20%) discount and exemption from the value-added tax (VAT), if applicable, on the sale of the following goods and services from all establishments, for the exclusive use and enjoyment or availment of the senior citizen.xxx

“(7) on the utilization of services in hotels and similar lodging establishments, restaurants and recreation center xxx” (Emphasis and underscoring supplied)

Based on the aforementioned provisions of laws, your grandmother, as a senior citizen, is entitled to a 20 percent discount and an exemption on VAT on the utilization of hotels and lodging services. This benefit applies even if your grandmother, who is a senior citizen, uses a gift check, which was previously issued to you for monetary consideration, to pay for the hotel she wants to stay at. This is so because it is clearly stated in the law that the discount intended for senior citizens shall apply even if the payment used for qualified goods or services is a gift check. Therefore, the additional amount your grandmother must pay, if there is any, is only the remaining balance from the published room rate after deducting her senior citizen discount and the amount stated on her gift check.

We hope that we were able to answer your queries. Please be reminded that this advice is based solely on the facts you have narrated and our appreciation of the same. Our opinion may vary when other facts are changed or elaborated on.

Editor’s note: Dear PAO is a daily column of the Public Attorney’s Office. Questions for Chief Acosta may be sent to [email protected]