RR No. 1-2009: Prescribes the rules and regulations to implement RA No. 9442 relative to the tax privileges of persons with disability and tax incentives for establishments granting sales discount

Key points

1. 20% discount privilege. Persons with disability get at least 20% off goods and services for their exclusive use from hotels and restaurants, sports and recreation centers, theaters and similar venues, drugstores, medical and dental services, domestic air and sea transport, and land transport such as buses and public railways. Toll fees of skyways and expressways are also discounted, but only for a person with disability who owns the vehicle.
2. Promotional fares and other discounts. For domestic air and sea travel, a person with disability who picks a higher promotional fare discount loses the 20% privilege. The privileges cannot be claimed with a higher discount from the establishment, other laws, or other discount programs, so one who is also a senior citizen gets only one 20% discount per transaction.
3. Deduction by establishments. Establishments may deduct the sales discount from gross income, after cost of goods sold or cost of service, in the same taxable year. Only the portion used exclusively by the person with disability qualifies, the discount must be shown separately on the invoice or receipt, and the deduction cannot exceed 20% of the gross selling price or gross receipt.
4. Record keeping. Establishments keep separate records showing the name of the person with disability, ID Number, gross sales or receipts, discount granted, date, and invoice number for each sale.
5. Exemptions for a benefactor. A single benefactor of a person with disability gets the personal exemption of P 50,000, subject to the Transitory Provisions of RR No. 10-2008. The additional exemption of P 25,000 per qualified dependent child (not exceeding four) applies only when the person with disability is the benefactor’s own child, legitimate, illegitimate, or legally adopted, whether minor or of legal age.
6. Proof of entitlement and penalties. A Filipino person with disability shows an ID from the city or municipal mayor or barangay captain, a passport, or a transportation discount fare ID from the NCWDP. A first violation carries a fine of P 50,000.00 to P 100,000.00 or imprisonment of six months to two years, or both. Later violations carry P 100,000.00 to P 200,000.00 or two to six years, or both.

Who is affected

• Persons with disability who are Filipino citizens
• Establishments granting sales discounts to persons with disability
• Benefactors of persons with disability