House bill grants additional benefits to PWDs through VAT exemption

By Sammy F. Martin

MANILA, Oct. 27 (PNA) — Persons with disability (PWDs) have something to rejoice after the House Committee on Ways and Means approved on Monday a substitute bill granting them value-added tax (VAT) exemption on certain goods and services.

Marikina City Rep. Romero Quimbo, the panel chairman, together with all the members present, passed the substitute measure to House Bill No. 1039 of Leyte Rep. Ferdinand Martin Romualdez and HB 3826 penned by Pasay City Rep. Imelda Calixto-Rubiano.

The bill seeks to amend Section 32 of Republic Act No. 7277, otherwise known as the “Magna Carta for Persons with Disability,” as amended by R.A. 9442, by providing that “PWDs shall be exempted from VAT in addition to the 20 percent discount they are already enjoying for the classes of goods and services.”

Romualdez said his proposal is an equalizing measure because this will accord PWDs exactly the same privilege enjoyed by senior citizens who are exempted from the VAT by virtue of R.A. 9994.

“Persons with disability effectively enjoy only Php 12 for every Php 100 worth of goods or service because the law does not exempt them from VAT, which is imposed on the net value of the goods or service or 10 percent of the Php 80 after deducting Php 20, representing the 20 percent discount granted in R.A. 9442, for every Php 100 worth of goods or service purchased,” said Romualdez, head of the House independent minority bloc.

The proposed VAT exemption shall apply on the following: medical and dental services; purchase of medicines in all drugstores; public railways, skyway and bus fares; admission fees charged by theaters, cinema houses, concert halls, circuses, carnivals and other places of culture, leisure and amusement; and all services in hotels and similar lodging establishments, restaurants, and recreation centers.

Calixto, meanwhile, said that this measure is in response to the universal challenge to protect the rights and the welfare of PWDs.

For his part, ABAKADA Party-list Rep. Jonathan Dela Cruz, co-author of H.B. 1039, said, “It is about time that we give this kind of privilege and assistance to PWDs for them to be active and productive members of society. This is a matter of justice for the disadvantaged sectors.”

Earlier, the Department of Finance opposed the proposed tax exemption for PWDs, saying it will affect the government revenue generation.

“The Department of Finance recognizes the good intention of the proponent in drafting this bill, we, however, believe VAT exemption on purchases of certain goods and services by PWDs will not really directly benefit them in as much as it would entail a cost to the revenue generating capability of the government [like what happened when the tax exemption for senior citizens was implemented,” the DOF said.

DOF records as of 2009 show the government missed Php 1.7 billion revenue due to the tax exemption of senior citizens. Instead of tax exemption, the DOF said the government should provide a subsidy to PWDs.

Meanwhile, the National Council on Disability Affairs (NCDA) has expressed support for the enactment of the bill into law.

In its letter to Quimbo, NCDA acting executive director Carmen Reyes-Zubiaga expressed support for HB 1039.

Reyes-Zubiaga said that on the issue of revenue loss, the segment of population who will be able to avail of these VAT exempt privileges is negligible compared to the population at large.

She said the 2010 Census on Housing and Population pegged the disability population at 1,443,000, which is 1.57 percent of the 92,098,000 population of the country.

“The documented summary of issued ID cards by NCDA shows an issuance of 348,766 which is only 0.38 percent of the country’s total population,” she said.

At this number, Reyes-Zubiaga said notice should be given to the fact that not all of these PWD ID cardholders have the purchasing power to consume goods and services that entitle them to VAT exemption.

“Unless a concrete study on the amount of expenditure of PWDs and the amount of revenue which the government will lose is presented, the NCDA firmly supports that this bill be passed into law,” Reyes-Zubiaga stressed. (PNA)