Senate OKs bill exempting disabled from VAT


Sixteen senators voted in favor of the passage of a bill seeking to exempt persons with disabilities (PWDs) from paying the mandatory 12 percent Value Added Tax (VAT) on goods and services on third and final reading.

Under Senate Bill No. 2890, the VAT exemption granted to PWDs will be on top of the 20 percent discount they are entitled to on particular goods and services.

Senator Sonny Angara, chairman of the Ways and Means Committee and sponsor of the bill, said the new tax breaks are part of growing government programs and policies meant to assist the sick and handicapped and uplift them in their moments of need, as mandated under existing laws such as Republic Act 7277.

RA 7277, also known as the Magna Carta for Disabled Persons, provides a 20 percent discount for PWDs on the sale of goods and services such as medicines, medical and dental services, hospital and laboratory fees, local transport fares, restaurants, hotels, theaters and educational assistance.

A similar bill authored by Rep. Ferdinand Romualdez was approved on third and final reading by the House of Representatives last year.

The measure also aims to ensure that PWDs will be considered as dependents of a taxpayer under the Tax Code provided that the PWD is not gainfully employed and is chiefly dependent and living with the taxpayer.

Senate President Pro-Tempore Ralph Recto, principal author of the bill, said an income tax exemption of P25,000 will also be granted to those caring for PWDs.

“The tax deduction is the same as what is currently claimed by a parent of a child not over the age of 21, which is P25,000 annually. It is only right to remove the age criteria for a PWD-dependent because caring for him or her does not have a fixed expiry date. In many cases, it extends from cradle to grave,” Recto said.

Based on the 2010 data from the Philippine Statistics Authority, there are over 1.4 million disabled Filipinos, or 1.57 percent of the country’s population.


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