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As featured on PhilStar:  NayTay


It is at times said that being a solo parent means twice the work, stress and tears – but also twice the hugs, love and pride.

Solo parents face a unique set of challenges as they assume the role of both mother and father, essentially becoming a NayTay (Nanay at Tatay). One of the most difficult aspects of solo parenting is overcoming financial challenges and working with budget constraints, especially so during the pandemic, with the restrictions and lockdowns triggering job losses and increases in the price of commodities. 

According to a World Health Organization-funded study by the Department of Health (DOH) and the University of the Philippines-National Institutes of Health, the number of solo parents in the Philippines is currently estimated at 14 to 15 million. As such, it is important that the government and private sector promote policies and programs that support and help solo parents in the country.

One example of this support is Republic Act (RA) No. 8972 or the Solo Parents’ Welfare Act of 2000 which provides a comprehensive package of social welfare benefits from different government agencies such as the Department of Social Welfare and Development (DSWD), Commission on Higher Education (CHED), Technical Education and Skills Development Authority (TESDA), and more. This law aims to provide certain benefits to ensure that solo parents are given equal opportunities as well as rights and privileges under the law.

In its continuing commitment to protect the welfare of solo parents, the legislation expanded the scope of applicability and increased the benefits granted to solo parents under a new law passed on 04 June 2022. This new law, RA No. 11861 or the Expanded Solo Parents Welfare Act, significantly amended the provisions of RA No. 8972. The new law affords additional benefits to solo parents on top of the privileges already extended to them under RA No. 8972 which was enacted more than two decades ago.

Further, the notable changes in RA No. 11861 include:

  1. Solo parents earning a minimum wage or below will receive a monthly cash subsidy of P1,000 from their respective local government units;
  2. A 10% discount and exemption from value-added tax (VAT) on baby’s milk, food and supplements and sanitary diapers, medicine, vaccines, and other medical supplements purchased for children until the age of six is granted to solo parents who are earning less than P250,000 a year;
  3. Prioritization of solo parents in re-entering the workforce, and their children as applicable, in apprenticeships, livelihood training, reintegration programs for OFWs, and other poverty alleviation programs;
  4. Prioritization and allocation in housing projects with liberal terms of payment on government low-cost housing.

The DSWD and other partner agencies signed the implementing rules and regulations of RA No. 11861 last 29 September 2022.

In this connection, the Bureau of Internal Revenue (BIR) recently issued Revenue Regulations No. 1-2023 which implements the guidelines on the ten percent (10%) discount and the VAT exemption for qualified solo parents.

Under Section 3 of RR No. 1-2023, establishments that supply any of the goods identified under RA No. 11861 may claim the discounts as a tax deduction and shall be treated as an ordinary and necessary expense deductible from their gross income, subject to the following conditions:

A.    Only that portion of the gross sales exclusively used, consumed, or enjoyed by the Solo Parent's child/children with the age of six (6) years or under shall be eligible for the deductible sales discount.

B.    The gross selling price and the sales discount must be separately indicated in the sales invoice issued by the establishment for the sale of goods identified in the Act to the Solo Parent

C.   Only the actual amount of the discount granted or a sales discount not less than the statutory rate of 10%, whichever is higher, based on the gross selling price can be deducted from the gross income, net of VAT, if applicable, for Income Tax purposes, and from gross sales of the business enterprise concerned, for VAT or other Percentage Tax purposes.

D.   The seller must record its sales inclusive of the discount granted.

E.    The discount can only be allowed as a deduction from gross income for the same taxable year that the discount is granted.

F.    The business establishment giving sales discounts to qualified Solo Parents is required to keep a separate and accurate record of sales, which shall include the Name of the Solo Parent, SPIC number, Name/s of child/children with the age of six (6) years or under, gross sales, sales discount granted, date of transaction, and invoice number for every sale transaction to Solo Parent.

G.   The seller must not claim the Optional Standard Deduction during the taxable year.

Given the adverse economic effects of the COVID-19 pandemic, credit is due to our legislators and the concerned government agencies for taking into consideration the needs of NayTays. But is this enough? Being a solo parent is by no means an easy task, thus, the government must continue to actively look for ways and craft policies and programs to help support our NayTays.

Ma Angela De Castro
KPMG in the Philippines

Ma Angela De Castro is an Analyst from the Tax Group of KPMG in the Philippines (R.G. Manabat & Co.), a Philippine partnership and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. The firm has been recognized as a Tier 1 in Transfer Pricing Practice and in General Corporate Tax Practice by the International Tax Review. For more information, you may reach out to Ma Angela de Castro or Manuel P. Salvador III through ph-kpmgmla@kpmg.com, social media or visit www.home.kpmg/ph.

This article is for general information purposes only and should not be considered as professional advice to a specific issue or entity. The views and opinions expressed herein are those of the author and do not necessarily represent KPMG International or KPMG in the Philippines.