Senator Sherwin Gatchalian has sought an investigation into the tax leakages supposedly due to the proliferation and unscrupulous use of bogus person with disability (PWD) identification cards.

Gatchalian, in filing Senate Resolution No. 1239, said he has received reports of individuals selling fake PWD IDs in certain areas to holders who want to avail of a 20 percent discount and value added tax (VAT) exemption.

“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, chairman of the Senate Committee on Ways and Means.

“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,” the senator pointed out.

As an example, Gatchalian cited Bacolod City where 100 fake PWD IDs were discovered in Bacolod City. According to the senator, the IDs were printed on a different kind of paper, the PWD numbers were mixed up, and the encoded types of disabilities were spurious.

Gatchalian lamented that as various local governments (LGUs) have funded various assistance and incentives to PWDs, the use of fake PWD IDs undermined the success of these programs meant to address the needs of the sector.

Furthermore, the lawmaker said restaurant owners have also complained over losses sustained due to the use of fake PWD IDs that enable holders to avail of the 20 percent PWD discount and VAT exemption.

These restaurant owners, he said, have claimed that over the recent years, there has been a significant increase in sales made to PWDs from only five (5) percent to 30 percent.

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