IF you are a person with disability (PWD), expect to enjoy more sales discounts, as the Department of Finance and the Bureau of Internal Revenue (BIR) have issued regulations expanding the current benefits and privileges they enjoy under Republic Act (RA) 10754, as implemented by Revenue Regulations (RR) 5-2017.
For those unfamiliar with the term, PWDs refer to “those who have long-term physical, mental, intellectual and sensory impairments, which, in interaction with various barriers, may hinder their full and effective participation in society on an equal basis with others.”
Under RR 9-2019, PWDs now enjoy a special discount of 5 percent off the regular retail price, without exemption from the value-added tax (VAT) of basic necessities and prime commodities. The regulations defines “basic necessities” as “goods vital to the needs of consumers for their sustenance and existence.”
It lists down examples that includes rice, bread, fresh pork, beef and poultry meat, firewood, and kerosene.
On the other hand, “prime commodities” refer to goods not considered as basic necessities, but are essential to consumers, such as flour, onions, garlic, herbicides and steel wires.
This 5-percent discount is on top of the current 20-percent discount given by identified establishments for the exclusive enjoyment of PWDs. Among the establishments required to provide a 20-percent discount are hotels; theaters; drugstores (medicine purchases only); and local land, sea, and air transportation providers.
However, the enjoyment of the 5-percent and 20-percent discounts is not absolute, as it requires PWDs to comply with the following guidelines:
— Only goods and services sold by establishments identified in RR 5-2017 shall be considered for the 20-percent discount, as long as the purchase is for the exclusive enjoyment of the PWD. The sales of goods and services to PWDs are exempt from VAT.
— PWDs’ purchase of basic necessities and prime commodities as listed under RR 9-2019 are subject to a 5-percent discount off the regular retail price, without exemption from VAT, provided that these are commensurate to the PWD’s personal exclusive consumption and/or enjoyment within the calendar week.
— The total amount of the basic necessities and prime commodities bought shall not exceed P1,300 each calendar week and without the benefit of carrying over the unused amount.
— The maximum amount of P1,300 should be spent on at least four kinds of items listed as basic necessities and prime commodities.
A few observations on these guidelines:
— A PWD who purchases fresh milk at Mercury Drugstore will not be entitled to the 20-percent discount, but will enjoy the 5-percent discount (without exemption from VAT), as fresh milk is a basic necessity under RR 9-2019.
— A PWD will have to purchase basic necessities and prime commodities weekly to enjoy the 5-percent discount. This peculiar condition does not apply to the purchase of goods and services subject to the 20-percent discount.
— A PWD who spends P1,300.00 on Dinorado Rice will not be entitled to the 5-percent discount, as it should be spent on at least four kinds of items listed as basic necessities and prime commodities.
Let’s wait for a BIR circular that would to clarify these peculiar conditions.
Ron Arriesgado is a tax lawyer, a transfer pricing specialist, and partner at the LMA Law Offices in Makati City. He has managed and resolved taxation issues of local and multinational entities; resolved various tax assessment cases issued by the Bureau of Internal Revenue; and provided clients with the proper tax strategies to cancel or substantially lower tax assessments, among others.