Nationwide crackdown set vs fake PWD IDs

MANILA, Philippines — The Bureau of Internal Revenue (BIR) will launch a nationwide crackdown on the sale and use of fake identification cards for persons with disabilities, labeling the practice as a tax evasion scheme.

In a statement, BIR Commissioner Romeo Lumagui Jr. said he has ordered all BIR officials to coordinate with other government agencies to address this tax evasion scheme, as it has caused revenue loss of about P88.2 billion in 2023 alone.

“People who sell and use fake PWD IDs are not only committing tax evasion, they are also disrespecting legitimate and compliant PWDs,” Lumagui said.

“The discount given by law to PWDs is for the improvement of their well-being and easing of their financial burden. It is not some common discount card that is accessible to the general public. Expect the BIR to run after fake PWD ID sellers and users,” he said.

Under the law, PWDs are entitled to benefits such as a 20
 percent discount and an exemption from value-added tax (VAT) on specific goods and services. These privileges aim to enhance their quality of life and ease financial burdens.

However, the BIR said that the system has been exploited by individuals seeking to fraudulently claim these benefits using fake PWD IDs. These fake IDs are sold on the streets and through online marketplaces, making them easily accessible.

As part of its crackdown, the BIR said it will intensify tax audits of establishments that report PWD-related transactions.

Business establishments are required to maintain records of sales to PWDs, including the customer’s name, PWD ID number, stated disability, discount amount and VAT exemption details.

These records will be scrutinized to ensure the legitimacy of the PWD IDs. If the BIR finds that such PWD ID numbers are not legitimate, it will disallow the deductions claimed by the establishments. Further, VAT-exempt sales linked to fake IDs will be assessed with deficiency VAT, including penalties and interest.

The BIR will also intensify its coordination with relevant government agencies, including the Department of Health and the National Council on Disability Affairs, to verify the legitimacy of PWD IDs.

“With the assistance of key government agencies, strengthening enforcement and improving the monitoring of PWD-related transactions can help minimize fraud, ensure that benefits reach legitimate PWDs and protect the integrity of the government’s tax system,” the BIR added.