Manila: Senator Sherwin Gatchalian has initiated a resolution calling for an investigation into tax leakages resulting from the widespread use of counterfeit person with disability (PWD) identification cards. These fraudulent IDs are being used to unlawfully obtain a 20-percent discount and value-added tax (VAT) exemption.
According to Philippines News Agency, Gatchalian, through Senate Resolution No. (SRN) 1239, highlighted reports of fake PWD IDs being sold in various locations, including Bacolod City, where authorities discovered 100 counterfeit IDs. These IDs were found to be printed on non-standard paper, with mismatched PWD numbers and fake disability types encoded. In Cebu City, the government confiscated at least seven fake PWD IDs after receiving reports of an alleged increase in such fraudulent activities. The confiscated IDs did not correspond with names on the city government’s verified list of PWDs.
Senator Gatchalian, who chairs the Senate Committee on Ways and Means, expressed concern that th
e use of fake PWD IDs has deprived the national government of significant tax revenues that could have been collected if the VAT exemptions and PWD discounts had not been misused by unqualified individuals. He also noted that the success of local government units’ (LGUs) assistance and incentive programs for PWDs is being undermined by this issue.
Restaurant owners have voiced concerns over financial losses due to the misuse of fake PWD IDs, which allow holders to claim the 20 percent discount and VAT exemption. Gatchalian cited claims from restaurant owners indicating a substantial rise in sales to PWDs, escalating from 5 percent to 30 percent in recent years.
Republic Act 10754, known as the Act Expanding the Benefits and Privileges of Persons with Disability, permits establishments to reclaim PWD discounts through tax deductions based on the net cost of goods sold or services rendered. Gatchalian emphasized the need to assess the impact of tax leakages caused by fake PWD IDs on government tax collection,
to inform necessary legislation or policy recommendations.
