THE House Committee on Ways and Means on Monday approved a substitute bill granting value-added tax (VAT) exemption on certain goods and services to persons with disability (PWDs).
Members of the panel, chaired by Liberal Party (LP) Rep. Romero Quimbo of Marikina City, passed the substitute measure to House Bill (HB) 1039 of Lakas Rep. Ferdinand Martin Romualdez of Leyte and HB 3826 of LP Rep. Imelda Calixto-Rubiano of Pasay City.
The bill seeks to amend Section 32 of Republic Act (RA) 7277, otherwise known as the “Magna Carta for Persons with Disability,” as amended by RA 9442, by providing that PWDs shall be exempt 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 exempt from the VAT by virtue of RA 9994.
“Persons with disability effectively enjoy only P12 for every P100 worth of good or service because the law does not exempt them from VAT, which is imposed on the net value of the good or service or 10 percent of the P80 after deducting P20, representing the 20-percent discount granted in RA 9442, for every P100 worth of good or service purchased,” said Romualdez, head of the House independent minority bloc.
The proposed VAT exemption shall apply on medical and dental services; purchase of medicines in all drugstores; public railways, skyways and bus fare; 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 said this measure is in response to the universal challenge to protect the rights and the welfare of PWDs.
Party-list Rep. Jonathan de la Cruz of Abakada, co-author of the HB 1039, said that “it is about time that we gave 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 sector.”
Earlier the Department of Finance (DOF) opposed the proposed tax exemption for PWDs. The agency said the tax exemption for PWDs will affect the government revenue.
“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 inasmuch 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.
The DOF said that, as of 2009, the government has missed P1.7-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) 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 themselves 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 VAT exemption.
“Unless a concrete study on the amount of expenditure of PWDs and the amount of revenue which the government will lose, be presented, the NCDA firmly supports that this bill be passed into law,” Reyes-Zubiaga said.