BIR Targets Fake PWD ID Tax Scam

The Bureau of Internal Revenue (BIR) has launched a nationwide crackdown on the sale and use of fake Person with Disability (PWD) identification cards, following revelations of an estimated PHP 88.2 billion tax revenue loss in 2023.

BIR Commissioner Romeo D. Lumagui Jr. emphasized the severity of the issue, calling it both a financial crime and an insult to legitimate PWDs.

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

PWDs are entitled to a 20% discount and exemption from Value-Added Tax (VAT) on select goods and services under Republic Act (R.A.) No. 7277, as amended by R.A. No. 10754. These benefits aim to ease the financial burden on PWDs and improve their quality of life.

However, unscrupulous individuals have exploited the system, selling counterfeit PWD IDs both online and offline to allow non-PWDs to fraudulently access these privileges.

During a December 5, 2024 Senate hearing on Senate Resolution No. 1239, lawmakers and stakeholders highlighted the economic and ethical implications of the scam. Businesses reported losses due to fraudulent discounts, while the government suffered from uncollected tax revenues.

The BIR has expressed gratitude to the Senate for addressing the issue and underscored its commitment to curbing the fraud.

“We will run after fake PWD ID sellers and users,” Lumagui said, vowing to hold violators accountable through intensified audits and inter-agency coordination.

Under Revenue Regulations No. 5-2017, establishments must document PWD transactions, including ID details and discounts provided. The BIR will validate these records and impose penalties on establishments using fake PWD IDs to claim VAT exemptions or deductions.

Fraudulent VAT-exempt sales will also be subject to additional assessments, penalties, and interest.

The BIR plans to work closely with the Department of Health and the National Council on Disability Affairs to verify the legitimacy of PWD IDs and tighten enforcement measures.

The agency hopes these actions will not only protect government revenues but also uphold the integrity of PWD laws and ensure that benefits are enjoyed solely by legitimate beneficiaries.

“This crackdown is a crucial step in safeguarding the intent of the law and securing much-needed revenue for government projects,” Lumagui said.

The BIR’s intensified campaign reflects its broader commitment to combating tax evasion and promoting fairness in the tax system.