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Senate probe into tax leakages allegedly due to fake PWD IDs sought

November 26, 2024 Camille P. Balagtas 187 views

SENATOR Sherwin Gatchalian wants to investigate tax leakages caused by the proliferation and unscrupulous use of fake Person With Disability (PWD) identification cards so holders can avail of a 20% PWD discount and value added tax (VAT) exemption.

Gatchalian revealed reports of individuals selling fake PWD IDs in certain areas as he filed proposed Senate Resolution 1239. For instance, more than 100 fake PWD IDs were discovered in Bacolod City. The IDs were printed on a different kind of paper, the PWD numbers were mixed up, and the encoded types of disabilities were spurious.

In Cebu City, the city government confiscated at least 7 fake PWD IDs after receiving reports of an alleged increase in the issuance of fake PWD IDs. The confiscated IDs did not match the names in the city government’s verified list of PWDs.

“The use of fake PWD IDs has robbed the national government of revenues it could have collected if not for the VAT-exemption and PWD discounts given to unqualified individuals,” said Gatchalian, chair of the Senate Committee on Ways and Means.

As various local government units have also funded various assistance and incentives to PWDs, the use of fake PWD IDs has also undermined the success of the programs of local government units meant to address the needs of PWDs, he said.

Further, restaurant owners have also raised concerns over losses sustained due to the use of fake PWD IDs that enable holders to avail of the 20% PWD discount and VAT exemption. Restaurant owners have claimed that over the recent years, there has been a significant increase in sales made to PWDs from only 5% to 30%.

Under Republic Act 10754, also known as the Act Expanding the Benefits and Privileges of Persons with Disability, establishments are allowed to recoup the PWD discounts granted through tax deductions based on the net cost of the goods sold or services rendered.

“We need to determine the effect on the government’s tax collection of the tax leakages caused by the proliferation of fake PWD IDs so we can craft the necessary legislation or policy recommendation,” Gatchalian emphasized.