Bill Exempting PWDs from VAT Ratified by Congress, Nears Enactment – Angara

The Senate and the House of Representatives have ratified the bicameral conference committee report of a bill exempting persons with disabilities (PWDs) from the 12-percent value added tax (VAT) on certain goods and services.

The bill, which seeks to expand the benefits and privileges of PWDs under Republic Act 7277 or the Magna Carta of PWDs, was co-authored by Senators Sonny Angara, Bam Aquino, Nancy Binay and Ralph Recto, and principally authored by Rep. Ferdinand Romualdez and sponsored by Ways and Means Committee Chairman Rep. Miro Quimbo in the Lower House.

“We in Congress recognize that there is still a lot to be done in uplifting the status of PWDs in our society. I thank our colleagues for the smooth passage of this bill which aims to give reprieve to the plight of over a million PWDs in the country,” said Angara, sponsor of the bill and chairman of the Senate ways and means committee.

Based on the 2010 data from the Philippine Statistics Authority, there were more than 1.4 million Filipino PWDs or those who are suffering from restriction or different abilities, as a result of a mental, physical or sensory impairment, to perform an activity in the manner or within the range considered normal for a human being.

Under the bill, PWDs will be exempted from the VAT on land transportation, domestic air and sea travels; on fees and charges for medical and dental services including diagnostic and laboratory fees, and professional fees of attending doctors in all government facilities as well as in all private hospitals and medical facilities; on cost of medicines; on funeral and burial services; on fees and charges in hotels, restaurants and recreation centers; and, on admission fees in theatres, cinema houses, concert halls, and other similar places of culture, leisure and amusement.

Aside from the VAT exemption, the measure also grants incentives to taxpayers who are caring for and living with a PWD, who are within the fourth civil degree of consanguinity or affinity to the taxpayer.

“As long as the PWD, regardless of age, is not gainfully employed and is chiefly dependent upon the taxpayer, the taxpayer caring for them can claim additional personal exemption under our Tax Code. We must ensure that these taxpayers are accorded the same privileges insofar as having dependents are concerned,” the lawmaker explained.

If this bill is passed into law, it will align the PWD law with that of the Expanded Senior Citizens Act which provides a VAT exemption on top of their 20-percent discount on particular goods and services.

The Department of Finance pegged the estimated foregone revenue at P4 billion but the ways and means chairman argued that “the benefits that will be enjoyed by the PWDs and their families from this measure far outweigh the supposed revenue loss to the government.”

Meanwhile, both houses of Congress have also recently ratified the bicameral conference committee report of a bill granting local water districts (LWDs) automatic condonation of their unpaid income tax dues, removing the conditions prescribed under Republic Act 10026 or the Act Granting Income Tax Exemption to LWDs.

Angara explained that with the lifting of condonation requirements, the tax savings of these LWDs will help them improve water quality, expand their water services, and provide affordable potable water especially to areas that are beyond the reach of big water utilities.

Both bills will be then transmitted to the Malacanang for President Aquino’s signature.

senate.gov.ph