Fake PWD IDs cost gov鈥檛 P88.2B in taxes in 2023
Senator Sherwin Gatchalian presides during the public hearing on the use of Fake Person With Disability (PWD) Identification Cards at the Senate of the Philippines, Pasay City on Thursday, December 5, 2024. INQUIRER PHOTO / NIÑO JESUS ORBETA
The government is losing billions in tax revenues due to the proliferation and unscrupulous use of fake person with disability (PWD) identification cards, according to Sen. Sherwin Gatchalian.
Citing data gathered by the Senate committee on ways and means, Gatchalian said that in 2023 alone, the government lost P88.2 billion.
“In terms of tax leakage, system-wide—meaning the government plus the establishments, it’s about P110 billion. This means P110 billion was supposed to go to the government, but P88 billion of that is illegitimate because the source is obviously from illegitimate or fake PWD cards,” he said during the committee hearing on Thursday.
READ:
“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,” he pointed out.
Article continues after this advertisementEnticing discount
Gatchalian earlier filed Senate Resolution No. 1239 to determine the effects on the government’s tax collection of the leakage caused by the proliferation of fake PWD IDs “so we can craft the necessary legislation or policy recommendation.”
Article continues after this advertisementData from the Department of Health showed that as of November 2024, there are 1.8 million registered PWDs in the country.
But Gatchalian said that based on the committee’s estimates, there are 8.5 million fake PWD IDs circulating in the country, or almost five times the legitimate ones.
“The establishments also absorb the discount. So if you compute everything, it’s about P208 billion (in 2023). But P166 billion of that [went] to illegitimate PWDs … so the establishments are actually absorbing more for the fake PWD cards, rather than the legitimate PWDs going to their establishments,” he said.
“These are our estimates… but the tax leakage is very hard to capture. You don’t know the exact number of fake PWD cards out there. We will only have experiences and information from people to tell us their estimate on the number of fake PWD cards,” Gatchalian added.
He stressed that Republic Act No. 10754, also known as the Act Expanding the Benefits and Privileges of Persons with Disability, was designed to share responsibility in assisting PWDs.
Risk to businesses
“But unfortunately, the 20-percent discount plus the VAT exemption, amounting to a total of 32 percent discount, has become too enticing for some people who seek to avail themselves of the discounts even though they are not PWDs,” he said.
Gatchalian noted that the issuance of fake PWD IDs has become a lucrative business for unscrupulous individuals.
According to him, fraudulent IDs are being sold for as low as P300 in Bacolod City and as high as P1,300 in Valenzuela City.
Restaurant owners have also raised concerns 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.
Restaurant owners have claimed that in recent years, there has been a significant increase in sales made to PWDs from only 5 percent to about 30 percent.
“What we have seen so far in the previous two years, we detected 5 percent of our sales affected by PWD discounts. Now we are seeing 25 percent or more than a five-fold increase in the last two years. This will inevitably force us to raise prices, and when we raise prices the effect will be to harm the PWD themselves, the legitimate disabled people would be the victims of this fake PWD cards,” said Eric Teng, president of the Restaurant Owners of the Philippines (Resto PH), during the hearing.
Dubious cases
He said that they fully support the rights of PWDs and benefits extended to them, “but misuse of fake PWD cards affect[s] not just businesses but also the integrity of the law itself. What we want is to protect the rights of the PWDs.”
Teng said the restaurant industry has been encountering many “amusing” stories from individuals using fake PWD cards.
“We’ve had pilots who would give PWD cards for visual disability. In other words, they are legally blind pilots. We’ve had cases where husband and wife have the same serial number [on] the card and claim conjugal disability. We’ve had a lot of amusing stories that later on it becomes less funny because they are claiming so much discount,” he said.
According to Teng, it is not uncommon for restaurants to have a table of 10 people, with everyone having a PWD card.
“It is very regularly seen, 100-percent PWD card usage, when the population of the disabled community in the national population is 2 percent or less. This is not very easy for us to police because we don’t want to be the police. We don’t want to harm the reputation of our customers, who come in good faith to enjoy an evening with us. However, if we are forced to do so we just need the legitimacy or the directive from the government to allow us to do so,” he said.
“Our industry was about $16 billion in 2023. If we were to factor about 25 percent that means up to $1 billion was lost in sales for 2023 alone, and our industry is expected to double by 2029. Which means for $32 billion, if we expect 50 percent of that to be affected, the number would be staggering, the loss in revenue and the harm to the legitimate PWD community is very, very real, and it is a clear and present danger to the survival of the restaurant industry,” Teng said. INQ
