'sjjjfh'ff Ui '.;t
NINETEENTH CONGRESS OF THE ) 
REPUBLIC OF THE PHILIPPINES )
Third Regular Session 
)
SENATE 
S. NO.
24 NOV-4 PoSa
WKr Jii
Introduced by SEN. WIN GATCHALIAN
AN ACT
AMENDING SECTIONS 22, 32, 34, 38, 39, 42, 127, 174, 176, 179, 199, AND 
258 OF REPUBLIC ACT NO. 8424, OTHERWISE KNOWN AS THE NATIONAL 
INTERNAL REVENUE CODE OF 1997, AS AMENDED, AND FOR OTHER 
PURPOSES
EXPLANATORY NOTE
Fostering the growth of capital markets is pertinent in facilitating the 
mobilization of resources, promoting savings and investments, and enhancing liquidity 
and market efficiency.1 In addition, having deep capital markets also facilitate 
diversification of financing resources - enabling investors to tap on other sources of 
funding beyond traditional lenders.2 However, the current state of the Philippines 
indicates that we are still far from this, as evidenced by low investor participation rates 
and stock market capitalization.
Based on the 2021 Financial Inclusion Survey Report of the Bangko Sentral ng 
Pilipinas, 8.04 million out of 77.2 million Filipino adults have investment products
1 Investment Banking Council of America, (n.d.). What are capita! markets and how do they contribute 
to economic growth? Retrieved from https://www.investmentbankingcouncil.org/blog/what-are- 
capital-markets-and-how-do-they-contribute-to-economic-growth (date last accessed; November 4, 
2024).
2 Kim, C., Park, D., Park, J., &Tian, S. (2023). Local currency bond market development and current
stability 
amid 
market 
turmoil. 
Retrieved 
from
https://www.adb.org/sites/default/files/publication/892206/ewp-688-local-currency-bond-market- 
development-currency-stability.pdf (date last accessed: November 4, 2024).


ranging from stocks, bonds, government securities, among others. In other words, 
oniy 1 out of 10 Filipino adults have investment products.
Investing in the Philippines is more expensive vis-a-vis our neighboring 
countries. In 2023, based on the Asian Development Bank's Key Indicator Database, 
our stock market capitalization to Gross Domestic Product ("GDP")—essentially, the 
value of our stock market relative to the size of our economy—stood at only 54.1%. 
This is significantly lower than the average of 78.3% among our South East Asian 
neighbors. The importance of fostering an increase in stock market capitalization rests 
on the assumption that this represents an efficient savings and investment channel, 
where savings are mobilized to proper investment channels.3
A major factor to this situation is that the Philippines currently imposes the 
highest Stock Transaction Tax C'STT") among the South East Asian Economies which 
is at 0.6% tax on the value of the transaction. Our South East Asian neighbors, like 
Malaysia, Singapore, Thailand, Myanmar, and Cambodia, do not impose any STT. 
Meanwhile, Indonesia and Vietnam only impose a 0.1% STT.
According to the Philippines Stock Exchange ("PSE"), the proposed reduction in 
STT to 0.1% from 0.6% will lead to an aggregate value of stocks traded amounting 
to PhP 4.9 trillion in F.Y. 2029 - which will be 3.79 times greater than the value of 
stocks traded in F.Y. 2023.
Another contributing factor to the friction costs is the imposition of 
Documentary Stamp Taxes C'DST").
These friction costs create a barrier for Filipinos to engage in our capital 
markets, making investing costly and far-reaching. Thus, the proposed measure seeks 
to introduce the following:
1. Reduction of STT from 0.6% to 0.1% of the gross selling price or gross value 
in money of the shares of stock and other securities listed and traded through 
both local and foreign stock exchanges;
2. Reduction of DST on original issue of shares of stock from 1% to 0.75% of the 
par value of the shares of stock; and
3 Armas, J. & De Guzman, N. (2022). Introducing a multi-dimensional financial development index for 
the Philippines. Retrieved from https://www.bsp.gov.ph/Media_And_Research/WPS/WPS202205.pdf 
(date iast accessed: November 4, 2024)


3. Exemption of DST on original issuance, redemption, or other disposition of 
shares or units of participation in a mutual fund company and the issuance of 
certificate or other evidence of participation in a Unit Investment Trust Fund. 
These reforms would make investments more affordable thereby boosting capital 
markets and investment competitiveness of the Philippines.
In view of the foregoing, the passage of this measure is, 1^ sought.
ATCHALiAN


NINETEENTH CONGRESS OF THE ) 
REPUBLIC OF THE PHILIPPINES )
Third Regular Session 
)
SENATE 
S.B. NO. 28
'(©ffTf 0f :
24 NOV -4 P6 :58
R!:0-i 
0 C.
Introduced by SEN. WIN GATCHALIAN
AN ACT
AMENDING SECTIONS 22, 32, 34, 38, 39, 42, 127, 174, 176, 179, 199, AND 
258 OF REPUBLIC ACT NO. 8424, OTHERWISE KNOWN AS THE NATIONAL 
INTERNAL REVENUE CODE OF 1997, AS AMENDED, AND FOR OTHER 
PURPOSES
Be it enacted by the Senate and the House of Representatives of the Philippines in 
Congress assembled:
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SECTION 1. Short Title. -This Act shall also be known as the "CapitalMarkets
2 
Efficiency Promotion Act"
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SEC. 2. Declaration of Policy. - The financial sector plays a significant role in the
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long-term growth of the national economy. A key policy consideration is to allow the
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capital market to develop as efficiently as possible, with the least intervention. The
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optimal taxation of capital markets, and the products and transactions that come with
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them, is an essential element in developing the capital market. Towards this end, the
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State recognizes the necessity of a simpler, fairer, more efficient, and regionally
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competitive tax system to deepen the capital markets.
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In the same vein, the State recognizes that by making tax compliance easier and
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more equitable, progressivity is ensured, tax effort is improved, discretion is


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eliminated, and trust in the taxation system is built and enhanced. Accordingly, the
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State adopts the following policies:
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(a) The State shall endeavor to simplify an otherwise complex tax system for
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easy compliance;
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(b) The State shall promote capital market development and tax
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competitiveness within the context of globalization, increased capital mobility, and
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financial inclusion;
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(c) The State shall promote and incentivize the investment in the trading of
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equity and debt securities; and
10 
(d) The State shall aid the capacity of corporate entities to raise capital through
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the Philippine markets.
12 
SEC. 3. Section 22 of the National Internal Revenue Code of 1997, as amended,
13 
is hereby further amended to read as follows:
"SEC. 22. Definitions. - When used in this Title:
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"(A) XXX 
"x X X
"(L) The term 'shares of stock'shaW [include] REFER TO shares of 
stock of a corporation, warrants and/or options [to purchase shares of 
stock], WHETHER TO BUY OR SELL SECURITIES, as well as units of 
participation in a partnership (except general professional partnerships), 
joint stock companies, joint accounts, joint ventures taxable as 
corporations, associations, and recreation or amusement clubs (such as 
golf, polo or similar clubs), and mutual fund certificates.


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"(M) The term 'shareholder' shall [include] REFER TO holders of a 
share/s of stock, warrant/s and/or option/s [to purchase shares of stock of 
a corporation], WHETHER TO BUY OR SELL SECURITIES, as well as a 
holder of a unit of participation in a partnership (except general professional 
partnerships), in a joint stock company, a joint account, a taxable joint 
venture, a member of an association, recreation or amusement club [(]such 
as golf, polo, or similar clubs[)] and a holder of a mutual fund certificate, 
a member in an association, joint-stock company, or insurance company.
"x X X
"(T) The term 'securities' [means shares of stock in a corporation and 
rights to subscribe for or to receive such shares. The term includes bonds, 
debentures, notes or certificates, or other evidence of indebtedness, issued 
by any corporation, including those issued by a government or poiiticai 
subdivision thereof, with interest coupons or in registered form.] SHALL 
REFER TO SHARES, PARTICIPATION, OR INTEREST IN A 
CORPORATION, OR IN A COMMERCIAL ENTERPRISE, OR PROFIT­
MAKING VENTURE EVIDENCED BY A CERTIFICATE, CONTRACT, 
INSTRUMENTS, WHETHER WRITTEN OR ELECTRONIC IN 
CHARACTER WHICH SHALL INCLUDE:
"(1) SHARES OF STOCK, BONDS, DEBENTURES, NOTES, 
EVIDENCES OF INDEBTEDNESS, AND ASSET-BACKED 
SECURITIES;


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"(2) INVESTMENT CONTRACTS, CERTIFICATES OF INTEREST,
OR PARTICIPATION IN A PROFIT-SHARING AGREEMENT SUCH AS 
CERTIFICATE OF DEPOSIT FOR A FUTURE SUBSCRIPTION;
”(3) FRACTIONAL UNDIVIDED INTERESTS IN OIL, GAS, OR 
OTHER MINERAL RIGHTS;
"(4) CERTIFICATES OF ASSIGNMENTS, CERTIFICATES OF 
PARTICIPATION, TRUST CERTIFICATES, VOTING TRUST 
CERTIFICATES, OR SIMILAR INSTRUMENTS;
"(5) PROPRIETARY OR NON-PROPRIETARY MEMBERSHIP 
CERTIFICATES IN CORPORATIONS; AND
"(6) OTHER SIMILAR INSTRUMENTS AS MAY BE 
DETERMINED BY THE SECURITIES AND EXCHANGE COMMISSION.
"x X X."
SEC. 4. Section 32 of the National Internal Revenue Code of 1997, as
15 amended, is hereby further amended to read as follows:
"SEC. 32. Gross Income, -x x x
"(B) Exclusions from Gross Income. -The following items shail not be 
inciuded in gross income and shali be exempt from taxation under this Title:
"x X X
"(7) Miscellaneous Items. - 
"x X X
"(H) INTEREST INCOME AND GAINS FROM THE SALE, 
TRANSFER, OR DISPOSITION OF PROJECT SPECIFIC BONDS. - 
SPECIFIC BONDS THAT ARE ISSUED BY THE REPUBLIC OF THE


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PHILIPPINES OR ANY OF ITS INSTRUMENTALITIES TO FINANCE
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CAPITAL EXPENDITURES OR PROGRAMS COVERED BY THE
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PHILIPPINE DEVELOPMENT PLAN OR ITS EQUIVALENT AND
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OTHER GOVERNMENT PROGRAMS CONSIDERED TO BE OF HIGH-
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LEVEL PRIORITY OF THE COUNTRY, AS DETERMINED BY THE
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SECRETARY OF FINANCE.
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"([h]I) Gains from Redemption of Shares OR UNITS OF
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PARTICIPATION in Mutual Fund AND UNIT INVESTMENT TRUST
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FUND. - Gains realized by the investor upon redemption of shares of stock
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in a mutual fund company as defined in Section 22 (BB) of this Code, OR
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UNITS OF PARTICIPATION IN A MUTUAL FUND OR UNIT
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INVESTMENT TRUST FUND: PROVIDED, THAT, PRIOR TO SUCH
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REDEMPTION, FINAL TAXES DUE ON REALIZED GAINS HAVE BEEN
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PREVIOUSLY WITHHELD AT THE LEVEL OF THE UNDERLYING
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ASSETS.
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([i]J) Income Derived from the Sale of Gold Pursuant to Republic Act
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No. 7076. - XXX."
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SEC. 5. Section 34 of the Nationai Internal Revenue Code of 1997, as amended,
19 
is hereby further amended to read as follows:
20 
"SEC. 34. Deductions from Gross Income. - Except for taxpayers
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earning compensation income arising from personal services rendered
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under an employer-employee relationship where no deductions shall be
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allowed under this Section, in computing taxable income subject to income


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tax under Sections 24(A); 25(A); 26; 27(A), (B), and (C); and 28(A)(1), 
there shall be allowed the following deductions from gross income:
"(A) Expenses. - x x x
"X X X
"(E) Bad Debts. -
"(1) In General, -x x x
"(2) Securities Becoming Worthless. - If securities, as defined in 
Section 22(T), are ascertained to be worthless and charged off within the 
taxable year and are capital assets, the loss resulting therefrom shail[, in 
the case of a taxpayer other than a bank or trust company incorporated 
under the iaws of the Philippines a substantiai part of whose business is the 
receipt of deposits, for the purpose of this Title,] be considered as a loss 
from the sale or exchange OF CAPITAL ASSETS, on the last day of such 
taxable year[, of capital assets]. SECURITIES HELD BY A DEALER IN 
SECURITIES OR AN ENTITY LICENSED BY THE APPROPRIATE 
GOVERNMENT REGULATORY AGENCIES TO BUY AND SELL 
SECURITIES, INCLUDING BANKS AND OTHER FINANCIAL 
INTERMEDIARIES, SHALL BE CONSIDERED ORDINARY ASSETS, 
AND SECURITIES HELD THAT ARE ASCERTAINED TO BE 
WORTHLESS SHALL BE CONSIDERED ORDINARY LOSSES THAT 
ARE ALLOWED AS DEDUCTION FROM TAXABLE INCOME.
"X X X."
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SEC. 6. Section 38 of the National Internal Revenue Code of 1997, as amended,
24 
is hereby further amended to read as foilows:


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"SEC. 38. Losses from Wash Sales of Stock or Securities. -
2 
"(A) In the case of any loss claimed to have been sustained from any
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sale or other disposition of shares of stock or securities where it appears
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that within a period beginning thirty (30) days before the date of such sale
5 
or disposition and ending thirty (30) days after such date, the taxpayer has
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acquired (by purchase or by exchange upon which the entire amount of
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gain or loss was recognized by law), or has entered into a [contact]
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CONTRACT or option so AS to acquire[,] substantially identical stock or
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securities, then no deduction for the loss shall be allowed under Section 34
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unless the claim is made by a dealer in stock or securities OR BY ANY
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ENTITY OR FINANCIAL INTERMEDIARY DULY LICENSED BY THE
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APPROPRIATE GOVERNMENT REGULATORY AGENCIES TO BUY
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AND SELL SECURITIES EITHER FOR THE ENTITY'S OWN ACCOUNT
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OR FOR THE ACCOUNT OF OTHERS and with respect to a transaction
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made in the ordinary course of the business of such dealer, ENTITY, OR
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FINANCIAL INTERMEDIARY.
17 
"X X X."
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SEC. 7. Section 39 of the National Internal Revenue Code of 1997, as amended,
19 
is hereby further amended to read as follows:
20 
"SEC. 39. Capital Gains and Losses. -
21 
"(A) Definitions. - As used in this Title -
22 
"x X X
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"(C) Limitation on Capital Losses. - Losses from sales or exchanges of
24 
capital assets shall be allowed only to the extent of the gains from such


1 
sales or exchanges. If a [bank or trust company incorporated under the
2 
laws of the Philippines, a substantial part of whose business is the receipt
3 
Of deposits,] DEALER IN SECURITIES OR OTHER ENTITY OR
4 
FINANCIAL INTERMEDIARY DULY LICENSED BY THE
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APPROPRIATE GOVERNMENT REGULATORY AGENCIES TO TRADE
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IN SECURITIES, sells any bond, debenture, note, or certificate or other
7 
evidence of indebtedness issued by any corporation, [(]including one issued
8 
by a government or political subdivision thereof[)], with interest coupons
9 
or in registered form, any loss resulting from such sale shall not be subject
10 
to the foregoing limitation and shall not be included in determining the
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applicability of such limitation to other losses.
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"(D) Net Capital Loss Carry-over. - x x x
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"(E) Retirement of Bonds, Etc. -x x x
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"(F) Gains or Losses from Short Sales, Etc. -
15 
"(1) XXX
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"(2) XXX
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"x X X."
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SEC. 8. Section 42 of the National Internal Revenue Code of 1997, as amended,
19 
is hereby further amended to read as follows:
20 
"SEC. 42. Income from Sources Within the Philippines. -
21 
"(A) Gross Income from Sources Within the Philippines. - The
22 
following items of gross income shall be treated as gross income from
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sources within the Philippines:


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"(1) Interests. - Interests or YIELD [derived from sources within the
2 
Philippines, and interests on] FROM DEBT INSTRUMENTS, BANK
3 
DEPOSITS, DEPOSIT SUBSTITUTES, TRUST FUNDS, AND SIMILAR
4 
ARRANGEMENTS SUCH AS bonds, notes or other interest-bearing
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obligations of residents, corporate or otherwise[;], INCLUDING DEBT
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INSTRUMENTS OR DEBT SECURITIES ISSUED BY THE
7 
GOVERNMENT OR ANY OF ITS AGENCIES OR
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INSTRUMENTALITIES;
9 
"x X X."
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SEC. 9. Section 127 of the National Internal Revenue Code of 1997, as amended,
11 
is hereby further amended to read as follows:
12 
"SEC. 127. Tax on Sale[, Barter] or Exchange of Shares of Stock Listed
13 
and Traded through [theJA Local OR FOREIGN Stock Exchange [or
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through Initial Public Offering], -
15 
"(A) Tax on 5<3/e(, Barter] or Exchange of Shares of Stock Listed and
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Traded through [the] A Local Stock Exchange. - There shall be levied,
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assessed and collected on every sale, [barter,] exchange, or other
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disposition of shares of stock AND OTHER SECURITIES listed and traded
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through [the] A local stock exchange, other than the sale by a dealer in
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securities, IN LIEU OF CAPITAL GAINS TAX, a tax at the rate of [six]
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ONE-tenths of one percent ([6]1/10 of 1%) of the gross selling price or
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gross value in money of the shares of stock sold, [bartered,] exchanged, or
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otherwise disposed which shall be paid by the seller or transferor.


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"ANY GAIN REALIZED FROM THE SALE, EXCHANGE, OR 
DISPOSITION OF LISTED SHARES OF STOCK BY A DEALER IN 
SECURITIES LICENSED BY THE APPROPRIATE GOVERNMENT 
REGULATORY AGENCIES TO BUY AND SELL SECURITIES, FOR HIS 
OWN ACCOUNT IN THE ORDINARY COURSE OF BUSINESS, SHALL 
NOT BE SUBJECT TO TAX UNDER THIS SUBSECTION BUT TO 
SECTION 27(A) AS AN ORDINARY INCOME.
[(B) Tax on Shares of Stock Sold or Exchanged Through Initial Public 
Offering. - ]
"(B) TAX ON SALE OR EXCHANGE OF SHARES OF STOCK 
LISTED AND TRADED THROUGH A FOREIGN STOCK EXCHANGE. - 
THERE SHALL BE LEVIED, ASSESSED, AND COLLECTED ON EVERY 
SALE, EXCHANGE, OR OTHER DISPOSITION OF SHARES OF STOCK 
OF A DOMESTIC CORPORATION LISTED AND TRADED THROUGH A 
FOREIGN STOCK EXCHANGE OTHER THAN THE SALE BY A DEALER 
IN SECURITIES, IN LIEU OF CAPITAL GAINS TAX, A TAX AT THE 
RATE OF ONE-TENTHS OF ONE PERCENT (1/10 OF 1%) OF THE 
GROSS SELLING PRICE OR GROSS VALUE IN MONEY OF THE 
SHARES OF STOCK SOLD, EXCHANGED OR OTHERWISE DISPOSED 
WHICH SHALL BE PAID BY THE SELLER OR TRANSFEROR.
[(C) Return on Capital Gains Realized from Sale of Shares of Stocks.
]
"([1]C) Return on [Capital Gains Realized from] Sale of Shares of 
Stock AND OTHER SECURITIES Listed and Traded in [the] A Local OR
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FOREIGN Stock Exchange. - It shall be the duty of every stock broker who 
effected the sale subject to the tax imposed herein to collect the tax and 
remit the same to the Bureau of Internal Revenue within five (5) banking 
days from the date of collection thereof and to submit on Mondays of each 
week to the secretary of the stock exchange, of which [he] THE 
TAXPAYER is a member, a true and complete return which shall contain a 
declaration of all the transactions effected through [him] THE TAXPAYER 
during the preceding week and of taxes collected by [him]THE SAID 
TAXPAYER and turned over to the Bureau of Internal Revenue[.]: 
PROVIDED, THAT FOR RETURN ON SALES OF SHARES OF STOCK 
OF A DOMESTIC CORPORATION LISTED AND TRADED IN BOTH 
LOCAL AND FOREIGN STOCK EXCHANGES, THE COLLECTION AND 
REMITTANCE OF THE ABOVE TAX SHALL BE IN ACCORDANCE 
WITH THE RULES PROMULGATED BY THE SECRETARY OF 
FINANCE, UPON THE RECOMMENDATION OF THE COMMISSIONER 
OF INTERNAL REVENUE: PROVIDED, FURTHER, THAT THE 
REMITTANCE OF THE SAID TAX SHALL BE WITHIN A PERIOD NOT 
EXCEEDING TEN (10) BANKING DAYS.
[(2) Return on Public Offerings of Shares of Stock. - In case of primary 
offering, the corporate issuer shall file the return and pay the corresponding 
tax within thirty (30) days from the date of listing of the shares of stock in 
the local stock exchange. In the case of secondary offering, the provision 
of Subsection (C)(1) of this Section shall apply as to the time and manner 
of the payment of the tax.]
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"X X X"
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SEC. 10. Section 174 of the National Internal Revenue Code of 1997, as
3 
amended, is hereby further amended to read as follows:
4 
"SEC. 174. Stamp Tax on Original Issue of Shares of Stock. - On every
5 
original issue, whether on organization, reorganization or for any lawful
6 
purpose, of shares of stock by any association, company or corporation,
7 
there shall be collected a documentary stamp tax of [Two pesos (P2.00) on
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each Two hundred pesos (P200), or fractional part thereof,] SEVENTY-
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FIVE PERCENT OF ONE PERCENT (75% OF 1%) of the par value[,]
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of such shares of stock: Provided, That in the case of the original issue of
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shares of stock without par value, the amount of the documentary stamp
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tax herein prescribed shall be based upon the actual consideration for the
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issuance of such shares of stock: Provided, further, That in the case of stock
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dividends, on the actual value represented by each share.
15 
SEC. 11. Section 176 of the National Internal Revenue Code of 1997, as
16 
amended, is hereby further amended to read as follows:
17 
"SEC. 176. Stamp Tax on Bonds, Debentures, AND Certificates of
18 
Stock or Indebtedness Issued in Foreign Countries. - [On all] A
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DOCUMENTARY STAMP TAX OF SEVENTY-FIVE PERCENT OF ONE
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PERCENT (75% OF 1%) OF THE VALUE OF THE TRANSACTION
21 
SHALL BE COLLECTED FROM A PERSON SELLING OR
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TRANSFERING bonds, debentures, certificates of stock, or certificates of
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indebtedness issued in any foreign country[, there shall be collected from
24 
the person selling or transferring the same in the Philippines, such tax as is
12


1 
required by law on similar instruments when issued, sold or transferred In
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the Philippines]."
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SEC. 12. Section 179 of the National Internal Revenue Code of 1997, as
4 
amended, is hereby further amended to read as follows:
5 
"SEC. 179. Stamp Tax on AH Debt Instruments. - On every original
6 
issue of debt instruments, there shall be collected a documentary stamp tax
7 
of [One peso and fifty centavos (PI.50) on each Two hundred pesos (P200),
8 
or fractional part thereof,] SEVENTY-FIVE PERCENT OF ONE PERCENT
9 
(75% OF 1%) of the issue price of any such debt instruments: Provided,
10 
That for such debt instruments with terms of less than one (1) year, the
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documentary stamp tax to be collected shall be of a proportional amount in
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accordance with the ratio of its term in number of days to three hundred
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sixty-five (365) days: Provided, further, That only one documentary stamp
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tax shall be imposed on either loan agreement[, or] AND promissory notes,
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MORTGAGE, SECURITY INTEREST OVER PERSONAL PROPERTY,
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AND OTHER CONTRACTS issued to secure such loan.
17 
"For purposes of this Section, the term 'debt instrument' shail mean
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[debt] instruments representing borrowing and lending transactions
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including but not limited to debentures, certificates of indebtedness, due
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bills, bonds, loan agreements, including those signed abroad wherein the
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object of contract is located or used in the Philippines, instruments and
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securities issued by the government or any of its instrumentalities, deposit
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substitute, debt instruments, certificates or other evidences of deposits that
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are either drawing interest significantly higher the regular savings deposit
13


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taking into consideration the size of the deposit and the risks involved or
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drawing interest and having a specific maturity date, [orders for payment
3 
of any sum of money otherwise than at sight or on demand,] promissory
4 
notes, whether negotiable or non-negotiable, except bank notes issued for
5 
circulation."
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SEC. 13. Section 199 of the National Internal Revenue Code of 1997, as
7 
amended, is hereby further amended to read as follows:
8 
"SEC. 199. Documents and Papers Not Subject to Stamp Tax. - The
9 
provisions of Section 173 to the contrary notwithstanding, the following
10 
instruments, documents, and papers shall be exempt from the documentary
11 
stamp tax:
12 
"(a) XXX
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"x X X
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"(e) Sale[, barter, or], exchange, REDEMPTION OR OTHER
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DISPOSITION of shares of stock[,] listed and traded through the local
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stock exchange.
17 
"x X X
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"(O) 
ORIGINAL ISSUANCE, REDEMPTION, OR OTHER
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DISPOSITION OF SHARES IN A MUTUAL FUND COMPANY.
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n(P) ISSUANCE OF CERTIFICATE OR OTHER EVIDENCE OF 
PARTICIPATION IN A MUTUAL FUND OR UNIT INVESTMENT 
TRUST FUND."
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SEC. 14. Section 258 of the National Internal Revenue Code of 1997, as
24 
amended, is hereby further amended to read as follows:
14


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"SEC. 258. Unlawful Pursuit of Business. - Any person who carries on
2 
any business [for which an annual registration fee is imposed without
3 
paying the tax as required by law] WITHOUT REGISTERING THE SAME
4 
IN ACCORDANCE WITH SECTION 236 shall, upon conviction for each
5 
act or omission, be punished by a fine of not less than Five thousand pesos
6 
(P5,000) but not more than Twenty thousand pesos (P20,000) and [suffer]
7 
imprisonment of not less than six (6) months but not more than two (2)
8 
years: Provided, That in the case of a person engaged in the business of
9 
distilling, rectifying, repacking, compounding, or manufacturing any article
10 
subject to excise tax, he shall, upon conviction for each act or omission, be
11 
punished by a fine of not less than Thirty thousand pesos (P30,000) but
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not more than Fifty thousand pesos (P50,000) and suffer imprisonment of
13 
not less than two (2) years but not more than four (4) years.
14 
SEC. 15. Implementing Rules and Regulations. - Within ninety (90) calendar
15 
days from the effectivity of this Act, the Department of Finance, in consultation with
16 
the Securities and Exchange Commission, Bangko Sentral ng Pilipinas, Bureau of
17 
Treasury, and Bureau of Internal Revenue, after due consultation with the private
18 
sector, shall issue rules and regulations for the effective implementation of this Act.
19 
SEC. 16. Separability Clause. - If, for any reason, any article or provision of this
20 
Act, or any portion thereof, or application of such article, provision, or portion thereof
21 
to any person, group, or circumstance is declared invalid or unconstitutional, the
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remainder of this Act shall not be affected by such decision or declaration.
23 
SEC. 17. Repealing Clause. - The following laws or provisions of laws are hereby
24 
repealed or modified accordingly:
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(a) Section 9, insofar as the tax exemption on the issuance of bonds 
and securities is concerned, of Presidential Decree No. 1648, otherwise 
known as "Reorganizing the National Development Company and 
Establishing a Revised Charter Therefor";
(b) Sections 6, 7, and 8, insofar as the tax exemption on the issuance 
of bonds is concerned, of Executive Order No. 603, otherwise known as 
"Creating a Light Rail Transit Authority, Vesting the Same with Authority to 
Construct and Operate the Light Rail Transit (LRT) Project and Providing 
Funds Therefor";
(c) Section 12, insofar as the tax exemption on the issuance of bonds 
is concerned, of Republic Act No. 4850, otherwise known as "An Act 
Creating the Laguna Lake Development Authority, Prescribing its Powers, 
Functions and Duties, Providing Funds Therefor, and for Other Purposes";
(d) Sections 10 and 11, insofar as the tax exemption on the issuance 
of bonds is concerned, of Presidential Decree No. 696, otherwise known as 
"Revising Presidential Decree No. 286, dated September 5, 1973, as 
amended, otherwise known as The Charter of The Philippine Aerospace 
Development Corporation and for Other Purposes";
(e) Section 2(g), insofar as the tax exemption on the issuance of 
bonds is concerned, of Republic Act No. 85, as amended by Republic Act 
No. 2081, otherwise known as "An Act Creating the Rehabilitation Finance 
Corporation";
(f) Sections 76, 77, and 98, insofar as tax exemption on the 
documentary stamp tax on bonds is concerned, of Republic Act No. 3844,
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as amended by Republic Act No. 6389, otherwise known as the "Agriculturai 
Land Reform Code";
(g) Section 24, insofar as the tax exemption on the issuance of bonds 
is concerned, of Republic Act No. 3591, as amended by Republic Act No. 
9576 and Republic Act No. 10846, otherwise known as "An Act Increasing 
the Maximum Deposit Insurance Coverage, and in Connection Therewith, 
to Strengthen the Regulatory and Administrative Authority, and Financial 
Capability of the Philippine Deposit Insurance Corporation (PDIC), 
Amending for this Purpose Republic Act Numbered Three Thousand Five 
Hundred Ninety-One, as amended, otherwise known as The PDIC Charter, 
and for Other Purposes";
(h) Section 12, insofar as tax exemption on the issuance of bonds is 
concerned, of Executive Order No. 1037, otherwise known as "Creating the 
Philippine Retirement Park System, Providing Funds Therefor and for Other 
Purposes";
(i) Sections 5 and 19, insofar as the tax exemption on the issuance of 
bonds is concerned, of Republic Act No. 8763 otherwise known as "Home 
Guaranty Corporation Act of 2000";
(j) Section 8(a), insofar as tax exemption on the documentary stamp 
tax of bonds is concerned, as provided under Section 1 of Republic Act No. 
6395 otherwise known as "An Act Revising the Charter of the National 
Power Corporation"; and
(k) Section 15, insofar as the tax exemption on the issuance of bonds 
is concerned, of Presidential Decree No. 334, as amended by Presidential
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1 
Decree No. 572, otherwise known as "Creating the Phiiippine National Oil
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Company, Defining its Powers and Functions, Providing Funds Therefore,
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and for Other Purposes."
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All laws, decrees, executive orders, implementing rules and regulations,
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issuances, or any part thereof inconsistent with the provisions of this Act are deemed
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repealed, amended, or modified accordingly.
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SEC. 18. Transitory Provision. - The changes introduced under this Act shall
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apply to financial instruments issued and transactions entered into on or after January
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1, 2025. Any tax exemption and preferential rates on financial instruments issued or
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transactions entered into, prior to the effectivity of this Act, shall remain valid for the
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remaining maturity of the relevant agreement.
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SEC. 19. Effectivity. - This Act shall take effect on January 1, 2025, following
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its complete publication in the Official Gazette or in at least one (1) newspaper of
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general circulation.
Approved,
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