The Bureau of Internal Revenue issued Revenue Regulations No. 5-2017 prescribing the guidelines for the implementation of the tax privileges of persons with disability (“PWDs”) and their benefactor, and tax incentives for the establishments granting sales discount and exemption from value-added tax (“VAT”) under Republic Act No. 9442, as amended, otherwise known as the “Magna Carta for Persons with Disability”.
The salient provisions of the said Revenue Regulations are as follows:
- PWDS are those who have long-term physical, mental, intellectual or sensory impairments, which, in interaction with various barriers, may hinder their full and effective participation in society on an equal basis with others.
- Benefactor refer to a Filipino citizen or resident alien, caring for, giving chief support and living with the PWD, who is related to the PWD within the 4th civil degree of consanguinity or affinity, and claiming such PWD as dependent.
- PWD-Dependent refer to a Filipino citizen who is a PWD, whether minor or of legal age, related to the benefactor within the 4th civil degree of consanguinity or affinity, not gainfully employed and who is living with and chiefly dependent upon such benefactor for his/her support.
- Qualified PWDs shall be entitled to claim at least twenty percent (20%) discount from the following establishments relative to the sale of goods and services for the exclusive use and enjoyment of the PWD (“Covered Transactions”):
- Hotels, lodging establishments, restaurants and recreation centers;
- Theaters, cinema houses, concert halls, circuses, carnivals and other similar places of culture, leisure and amusement;
- drugstores (regarding purchase of medicine);
- medical and dental services, including diagnostic, laboratory and professional fees;
- domestic land, air and sea transportation;
- funeral and burial services for the death of the PWD, excluding expenses incurred for obituary publication and cost of the memorial lot.
- The PWDs are prohibited from availing double discounts, i.e., the PWD cannot avail the privileges granted under the Regulation if the said PWD will also claim higher discount granted by commercial establishments, under existing laws or in combination with other discount program. Thus, a PWD, who is also a senior citizen, can only claim one (1) 20% discount on a particular transaction.
- Establishments granting sales discounts to PWDs on their sale of goods and/or services shall be entitled to deduct the said sales discount from their gross income subject to certain conditions.
- Sales of any goods and services to PWDs under the Covered Transactions shall be exempt from VAT.
- Subject to certain conditions, a Benefactor of a qualified PWD may claim the additional exemption of Twenty Five Thousand Pesos (P25,000.00) for each PWD if the latter qualifies as a PWD-Dependent. The total number of dependents (i.e., qualified dependent children and/or PWD-Dependent) for which additional exemptions may be claimed by the taxpayer/Benefactor shall not exceed four (4).