The Bureau of Internal Revenue (BIR) said on Monday that earnings of senior citizens are still subject to taxation even if they are granted 20-percent discounts on their purchases of a wide range of goods and services under the Expanded Senior Citizens Act (ESCA).

In still unsigned revenue regulations implementing the ESCA, an elderly individual “deriving compensation or otherwise are required to file their income tax returns and pay the tax as they file their return.”

Like other individual taxpayers, he is also exempted from filing returns and paying taxes if his gross earnings do not exceed the minimum wage, or if his income does not exceed his personal and additional exemptions.

However, the income tax exemption does not cover passive earning like the 20 percent final withholding tax on interest from bank deposits, trust funds, and similar arrangements.

He is likewise required to remit the 10 percent final withholding tax on cash or property dividends from a domestic corporation or from a joint stock company, insurance, or mutual fund.

He is not also exempted from the payment of capital gains tax from the sale of shares of stocks and real properties.

Water and electric bills are not covered by ESCA.