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RA 7277 AS AMENDED BY RA 9244

ADVANTAGES TO GOVERNMENT 1. Uniform basis of computation of VAT for sales of goods or services for persons with disabilities for purposes of efficient tax administration; 2. Non-availment by establishment of sales discounts as deduction from gross income if any of the conditions set for by RA 9244 is not observed; 3. Only that portion of the gross sales exclusively used, consumed or enjoyed by the person with disability shall be eligible for the deductible sales discounts; 4. Only the actual amount of the sales discount granted or a sales discount not exceeding 20% of the gross selling price or gross receipt can be deducted from the gross income, net of VAT, if applicable, for income tax purposes, and from gross sales or gross receipts of the business enterprise concerned, for VAT or other percentage tax purpose; 5. For purposes of tax monitoring, establishments availing the deductible sales discounts are subject to proper documentation under the Tax Code of 1997 as amended. DISADVANTAGES TO THE GOVERNMENT 1. Tax revenue from Local manufacturing or technical aids and appliances used by disabled persons will decrease because they shall be considered as a preferred area of investment subject to the provisions of Executive Order No. 226 otherwise known as the "Omnibus Investments Code of 1987" and, as such, shall enjoy the rights, privileges and incentives as provided in said Code such as, but not limited, to the following: (1) repatriation of investments; (2) remittance of earnings; (3) remittance of payments on foreign contracts; (4) freedom from expropriations; (5) freedom from requisition of investment; chan robles virtual law library (6) income tax holiday; (7) additional deduction for labor expense; (8) tax and duty exemption on imported capital equipment; (9) tax credit on domestic capital equipment; (10) exemption from contractor's tax; (11) simplification of customs procedures; chan robles virtual law library (12) unrestricted use of consigned equipment; (13) employment of foreign nationals; (14) tax credit for taxes and duties on raw materials; (15) access to bonded manufacturing/traded warehouse system; (16) exemption from taxes and duties on imported spare parts; and (17) exemption from wharfage dues and any export tax, duty, impost and fee 2. 3. 4. 5. Decrease of tax revenue because of the availment of the deductible sales discounts by establishments extending 20% sales discounts to persons with disabilities; Decrease of tax revenue because private firms that modify their facilities to accommodate the needs of PWDs are entitled to tax deductions; Decrease of tax revenue because individuals or nongovernmental institutions establishing homes, residential communities or retirement villages solely to suit the needs and requirements of persons with disability shall be accorded realty tax holiday for the first five years of operation; For purposes of granting the incentives, persons with disability shall be treated as dependents under Section 35(A) of the National Internal Revenue Code, as amended, and as such, individual taxpayers providing care for them shall be accorded the privileges granted by the Code insofar as having dependents under the same section are concerned.

ADVANTAGES TO THE TAXPAYER Local manufacturing or technical aids and appliances used by disabled persons shall be considered as a preferred area of investment subject to the provisions of Executive Order No. 226 otherwise known as the "Omnibus Investments Code of 1987" and, as such, shall enjoy the rights, privileges and incentives as provided in said Code such as, but not limited, to the following: (1) repatriation of investments; (2) remittance of earnings; (3) remittance of payments on foreign contracts; (4) freedom from expropriations; (5) freedom from requisition of investment; chan robles virtual law library (6) income tax holiday; (7) additional deduction for labor expense; (8) tax and duty exemption on imported capital equipment; (9) tax credit on domestic capital equipment; (10) exemption from contractor's tax; (11) simplification of customs procedures; chan robles virtual law library (12) unrestricted use of consigned equipment; (13) employment of foreign nationals; (14) tax credit for taxes and duties on raw materials; (15) access to bonded manufacturing/traded warehouse system; (16) exemption from taxes and duties on imported spare parts; and (17) exemption from wharfage dues and any export tax, duty, impost and fee DISADVANTAGES TO THE TAXPAYER 1. Prohibition against double discounts; 2. Pro-forma basis of computation of VAT for sales of goods or services for persons with disabilities; 3. Non-availment of the head of the family status by the person with disability; 4. The benefactor of the person with disability may only be entitled to claim the additional of Php25,000.00 per qualified child (not exceeding 4) if the person with disability is his or her legitimate, illegitimate or legally-adopted child or children , whether minor or of legal age; 5. For purposes of additional exemption, the benefactor will not be entitled to additional exemption unless that benefactor is a parent of the person with disability .