SIXTEENTH CONGRESS OF THE 
) 
REPUBLIC OF THE PHILIPPINES 
) 
First Regular Session 
) 
SENATE 
'13 
1171 
S.No. ___ _ 
BfC:· 
Introduced by Senator Antonio "SONNY" F. Trillanes IV 
EXPLANATORY NOTE 
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JUL 30 P'l :[19 
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It has always been the goal of the government to increase and enhance revenue collection and to put a 
stop to tax fraud and corruption. However. there seems to be an absence of a simple yet effective manner 
of easily verifying andlor authenticating all receipts. invoices, permits, licenses. clearances and official 
papers issued by all government agencies and instrumentalities, Government Owned and Controlled 
Corporations (GOCCs) and Local Government Units (LGUs) as well as private businesses, that will 
ensure full accounting and proper documentation of all business and commercial transactions in the 
country. 
In this regard, there is a need to establish and implement a simple yet fool-proof way of authenticating 
and verifying the correctness of transactions even by a mere naked eye examination to substantially 
enhance and improve government revenue without increasing taxes. 
This bill proposes the use of specialized or watermarked security paper on which all receipts, invoices. 
permits, licenses, clearances and all other official papers and documents issued by both the government as 
well as private entities shall be printed. Consequently, the adoption of such legislation will greatly 
enhance and strengthen tax monitoring and collection if the use of security watermarked paper for all 
receipts and other documents will be made a mandatory requirement for all commercial and business 
transactions. 
It should be noted that he National Tax Research Center (NTRC) of the Department of Finance (DOF), 
the government's lead agency when it comes to taxation, has expressed its support and full backing for the 
proposal to use water-marked paper in all receipts and similar documents to be issued by state agencies, 
local government units and even private and commercial establishments. The NTRC said this move 
would enhance and strengthen the tax monitoring and collection functions of the government. To quote 
the NTRcr' , 
"It is also expected that the use of watermarked paper in all commercial and business 
transactions could minimize if not completely eliminate the use of falsified receipts and 
other documents. " 
In the light of all the foregoing, the immediate consideration and p. 
age 0 this bill is most earnestly 
sought. 
ANT 
NN "F. TRILLANES IV 
Senator 
1 Please see the article: tlUse ofwateNnarked paper for receipts backed"; Philippine StUI' ~ July 8, 2008; See also, 
Philstar,com ~ http://wwwphilstarl.com/Article.aspx?articleld=71550 
1 


SIXTEENTH CONGRESS OF THE 
) 
REPUBLIC OF THE PHILIPPINES 
) 
First Regular Session 
) 
'13 
JUL 30 P 3 :()9 
SENATE 
S. No. 
1171 
Introduced by Senator Antonio "SONNY" F. Trillanes IV 
AN i\CT 
REQUIRING ALL GOVERNMENT AGENCIES, INSTRUMENTALITIES, LOCAL 
GOVERNMENT UNITS, AND GOVERNMENT OWNED AND CONTROLLED 
CORPORATIONS (GOCCs) AND PRIVATE ESTABLISHMENTS TO USE SECURITY 
WATER-MARKED PAPER IN ALL RECEIPTS AND INVOICES, PERMITS, 
LICENSES, CLEARANCES, OFFICIAL PAPERS OR DOCUMENTS 
Be it enacted in the Senate and House of Representatives of the Philippines in Congress 
assembled 
1 
SECTION 1. Short Title. - This Act shall be known as the "Document Authentication 
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and Security Act". 
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SEC. 2. Declaration of Policy. - It is hereby declared the policy of the State to: 
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(a) Enhance tax monitoring and collection; 
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(b) Increase revenue collection; and 
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(c) Avoid tax fraud and graft and corruption in the tax collection efforts. 
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SEC. 3. Definition of Terms. - The following definition oftenns is hereby adopted: 
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(a) "Receipt" is a written admission or acknowledgement of the fact of payment in money or 
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other settlement between seller and buyer of goods, debtor and creditor, or person rendering 
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services and client or customer printed in accordance with these regulations. 
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(b) "Sales or commercial invoice or delivery receipts" is a written account of goods are services 
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rendered and the price charged therefore, or a list of goods consigned and the value at which the 
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consignee is to receive them or any other list by whatever name is known which is used in the 
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ordinary course of business evidencing sale and transfer or agreement to sell or transfer goods 
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and service, e.g. purchase orders, delivery receipts, job orders, provisional and temporary 
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receipts, and others; 
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( c) "Security watennarked paper" shall refer to a paper material which bear watennark 
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containing such authorized security feature du.ly etched and embedded in the paper during its 
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manufacturing process. It is especially designed for the printing of receipts or sales or 
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commercial invoices. 
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SEC. 4. Covered Institutional Establishments. - All government agencies and 
2 
instrumentalities, including Government-Owned and/or Controlled Corporations, and all Local 
3 
Government Units and private and commercial establislnnents, whether corporations, 
4 
partnerships or sole proprietorships, shall use water-marked paper in all receipts, invoices, fonus, 
5 
permits, licenses, clearances, official papers and documents which they issue to all natural and 
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juridical persons transacting business with them. 
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SEC. 5. Procedure for Printing of Security Watermarked Paper. - The said agencies, 
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GOCCs and LGUs as well as all private establislnnents shall strictly comply with the 
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implementing rules and regulations (IRR) prescribing the procedures in accordance with which 
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such receipts, invoices, forms, permits, licenses shall be printed, as provided below. The said 
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documents shall be printed on security water-marked paper in accordance with prescribed fonu 
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and dimensions. 
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SEC. 6. Size and Form of Security Watermarked Paper. - The Department of Finance 
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(DOF), the Bureau ofIntemal Revenue (BIR) and the Bureau of Customs (BOC) shall prescribe 
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and formulate within a period of two (2) months from the effectivity of this Act, the appropriate 
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uniform dimensions and form of security watermarked paper to be used for all business and 
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commercial transactions in the Philippines. 
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SEC. 7. Covered Forms. - All receipts, invoices, permits, licenses and clearances and 
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other accountable fonus shall, after a period of six (6) months from the effectivity of this Act, all 
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be printed in security water-marked paper: Provided, That any such receipts, invoices, 
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commercial documents, permits, licenses and clearances as well as other accountable fonns 
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which remain unused and unconsumed after the lapse of said six -month period may still be used: 
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Provided, further, That appropriate inventory thereof as confinued and approved by the BIR is 
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conducted and: Provided, finally, That, after a period of six (6) months thereafter, the said unused 
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receipts, invoices, permits, licenses and clearances as well as other accountable forms shall no 
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longer be allowed for use in any transaction in the Philippines. 
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SEC. 8. Penalty. - Any person who fails to comply with the requirements of this Act, 
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including the parties involved in a transaction where the use of security water-marked paper is 
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prescribed, as well as government functionaries involved in the monitoring of regulating these 
4 
transactions, shall be subject to all the appropriate sanctions and penalties provided for in the 
5 
National Internal Revenue Code and other pertinent laws, rules and regulations. 
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SEC. 9. Implementing Agency. - The Secretary of the Department of Finance, upon the 
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recommendation of the Commissioner of Internal Revenue and the Commissioner of Customs, 
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shall immediately promulgate and adopt the appropriate implementing rules and regulations 
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(IRR) of this Act. Said IRR shall include the identification and setting of the standards upon 
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which the security watermarked paper shall be sonrced and supplied and such other details as 
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would be necessary and appropriate for the effective implementation ofthis Net. 
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SEC. 10. Separability Clause. - If for any reason any provision of this Act is declared 
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unconstitutional or invalid, the remainder or any provisions hereof not affected thereby shall 
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remain in full force and effect. 
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SEC. 11. Repealing Clause. - The provisions of any law, executive orders, presidential 
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decrees or other issuances inconsistent with this Act are hereby repealed or modified 
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accordingly. 
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SEC. 12. Effectivity Clause. - This Act shall take effect fifteen (15) days after its 
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complete publication in the Official Gazette and in at least two (2) newspapers of general 
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circulation. 
Approved, 
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