#AskTheTaxWhiz: VAT exemptions, discounts for PWDs

As a person with disability (PWD), is it true that I am exempt from value-added tax (VAT)? Is this the same as the PWD discount?

The VAT exemption of PWDs depends on the nature of the product. As reiterated by Revenue Regulations (RR) No. 9-2019, only the following goods or services are exempt from VAT:

Any item not listed above is still subject to VAT. Note, however, that the VAT exemption is not the same as the PWD discount.

Under RR No. 5-2017, PWDs can claim at least a 20% discount on the items above.

In addition, RR No. 9-2019 also sets a special 5% discount on basic necessities and prime commodities (but those items will not be exempt from VAT), provided that the total amount of the purchase will not exceed P1,300 per calendar week and that it's spent on at least 4 kinds of the qualified items.

For the purpose of the new 5% discount, what kinds of products are considered basic necessities or prime commodities?

According to RR No. 9-2019, the following are considered basic necessities:

Under the same regulations, the prime commodities are:

The list above also refers to the items that are not covered by the VAT exemption for PWDs.

For VAT-registered businesses, it is important to take note of their sales to VAT-exempt customers as they will have to report these to the Bureau of Internal Revenue.

Got more questions? Contact us at consult@acg.ph or (02) 622-7720. – Rappler.com

Mon Abrea, popularly known as the Philippine Tax Whiz, is one of the 2017 Outstanding Persons of the World, a Move Awards 2016 Digital Mover, one of the 2015 The Outstanding Young Men of the Philippines (TOYM), an Asia CEO Young Leader of the Year, and founding president of the Asian Consulting Group (ACG) as well as the Center for Strategic Reforms of the Philippines (CSR Philippines). Assisting him in his column is JM Miñano, communications associate of ACG. He graduated with a bachelor's degree in Communication Arts from the University of the Philippines Los Baños.

For inquiries, you may email consult@acg.ph or visit www.acg.ph for tax-related concerns.