AUG.

14, 2012

NR # 2831B

Persons with disabilities to get VAT exemption

A lawmaker today urged Congress to fast track the approval of a bill exempting persons with disabilities (PWDs) from paying value added tax (VAT) on medicine, transportation, hotels, restaurants, theaters and other business establishments. House Bill 6423, authored by Rep. Ferdinand Martin Romualdez (1st District, Leyte), seeks to amend Republic Act 7277 otherwise known as the Magna Carta for Persons with Disabilities. The bill is an equalizing measure because this will accord PWDs exactly the same discount privilege enjoyed by senior citizens by virtue of Republic Act 9994, who are enjoying a P20 discount or the equivalent of 20% for every P100 value of good or service purchased, Romualdez said. Persons with disabilities effectively enjoy only P12 for every P100 worth of good or service because the law does not exempt them from the VAT, which is imposed on the net value of the good or service or 10% of the P80 after deducting P20, representing the 20% discount granted in RA 9442, for every P100 worth of goods or service purchase, Romualdez added. The measure exempts PWDs from paying VAT on all services in hotels, restaurants, recreation centers, theaters, concert halls, carnivals, on fare for domestic air and sea travel, public railways, skyways and bus fare, among others. It also provides the PWDs exemption from VAT on the purchase of medicine, medical and dental services including diagnostic and laboratory fees, and professional fees of attending doctors in accordance with the rules and regulations to be issued by the Department of Health (DOH), in coordination with the PhilHealth. Under the bill, the establishments may claim the discounts granted as tax deductions based on the net cost of the goods sold or services rendered and the amount must be included in their gross sales receipts for tax purposes and shall be subject to proper documentation and to the provisions of the National Internal Revenue Code. The Department of Social Welfare and Development, the National Council on Disability Affairs (NCDA), the Department of Health (DOH) and the Bureau of Internal Revenue (BIR), in consultation with the concerned Senate and House committees, agencies, organizations and establishments shall formulate the implementing rules and regulations pertinent to this Act. Republic Act 7277 was enacted into law on March 24, 1992 and was amended five years later by RA 9442, on April 30, 2007, to provide certain privileges and incentives to PWDs, and was amended further by RA 10070, approved on April 6, 2010, mandating all local government units to adopt and establish social and structural mechanisms to serve and promote the interest, rights and welfare of PWDs. (30) jsc