NINETEENTH CONGRESS   
) 
REPUBLIC OF THE PHILIPPINES ) 
First Regular Session  
 
) 
HOUSE OF REPRESENTATIVES 
Introduced by Representative Rufus B. Rodriguez 
House Bill No.  _____ 
EXPLANATORY NOTE 
The Medium-Term Philippine Development Plan formulated at the turn of this century 
(MTPDP 2001-2004) stressed the need to provide risk protection to the poor. This landmark 
document recognized that "protecting the poor and the vulnerable groups is imperative in 
winning the battle against poverty". Among others, it called for the involvement of the private 
sector in providing access to insurance services to our impoverished population to protect 
them against losses arising from death, accident, sickness, injury, fire and other perils. Such 
tragedies and disasters can cause untold sufferings and serious financial dislocation to a 
household which can hardly provide food, clothing, shelter and medicine to its family members. 
Many of our people who live in abject poverty cannot afford the cost of social security programs 
which both the government and the private sector provide and the finite resources of our 
government does not allow it to extend adequate social protection to its needy population. 
Under the new Insurance Code of 2013 (R.A. No. 10607), Microinsurance was 
incorporated and defined in the law. Sec. 187 thereof defines Microinsurance as a "financial 
product or service that meets the risk protection needs of the poor where: (a) the amount of 
contributions, premiums, fees or charges, computed on a daily basis, does not exceed 7.5o/o 
of the current daily minimum wage rate for non-agricultural workers in Metro Manila; and, (b) 
the maximum sum of guaranteed benefits is not more than 1,000 times of the current minimum 
wage rate for non-agricultural workers in Metro Manila." 
Data show that only very few can avail of the maximum coverage and benefit allowed 
under the law. Given their meager income and irregular cash inflow, our low-salaried 
employees and informal workers still find Microinsurance expensive, if not unaffordable. One 
reason for this is the taxes imposed on Microinsurance policies sold by life and non-life 
companies. Most onerous are the taxes levied on non-life Microinsurance products which are 
taxed between 25Yo - 27.5o/o of the premium paid. A considerable amount of the premium 
paid by the hapless insured goes to tax instead of getting a more comprehensive coverage 
and benefits. The tax burden which is passed on to the insuring public prevents the 
optimization of the potential of Microinsurance to uplift the plight of the less privileged in our 
country. Removing the taxes will definitely bring down the cost of insurance protection by way 
of lower premium or more meaningful coverage with the same amount of premium. 
Microinsurers can deliver better products which can meet the insurance needs of the 
underserved, if not the totally unserved, sector of our population. 
Our government has limited resources to provide adequate social security protection 
to the masses. The recent Commission on Audit reports revealed that the government-
sponsored "Pantawid Pamilyang Pilipino Program (4Ps) despite its colossal cost and many 
years of implementation has failed to lift 90% of its participants from poverty. Private sector 
support in poverty reduction will boost the government efforts in improving the blighted lives 
of millions of Filipinos. Microinsurance is a sustainable and affordable tool to help deliver our 
people from helplessness, mendicancy and scarcity. 
In view of the foregoing, immediate approval of this measure is earnestly requested. 
RUFUS B. RODRIGUEZ 
April 11, 2023
8:00 am
7828


NINETEENTH CONGRESS   
) 
REPUBLIC OF THE PHILIPPINES ) 
First Regular Session  
 
) 
HOUSE OF REPRESENTATIVES 
Introduced by Representative Rufus B. Rodriguez 
House Bill No.  _____ 
AN ACT 
EXEMPTING MICROINSURANCE POLICIES FROM VALUE ADDED TAX, TAX ON LIFE 
INSURANCE PREMIUMS AND DOCUMENTARY STAMP TAX, AMENDING FOR THIS 
PURPOSE SECTIONS 108, 109, 123,183,184, 185, 186, AND 187 OF THE "NATIONAL 
INTERNAL REVENUE CODE OF 1997, AS AMENDED" 
Be it enacted by the Senate and House of Representatives of the Philippines in Congress 
assembled. 
SECTION 1. Section 108 of the National Internal Revenue Code of 1997 (NIRC), as amended, 
is hereby further amended to read as follows: 
"Sec. 108. Value-added Tax on Sale of Services and Use or Lease of 
Properties. - 
"(A) Rate and Base of Tax. - There shall be levied, assessed and collected, 
a value-added tax equivalent to twelve percent (12%) of gross receipts 
derived from the sale or exchange of services, including the use or lease 
of properties. 
"The phrase 'sale or exchange of services' means the performance of all 
kinds of services in the Philippines for others for a fee, remuneration or 
consideration, including those performed or rendered by construction and 
service contractors; stock, real estate, commercial, customs and 
immigration brokers; Iessors of property, whether personal or real; 
warehousing services; Iessors or distributors of cinematographic films; 
persons engaged in milling, processing, manufacturing or repacking goods 
for others; proprietors, operators or keepers of hotels, motels, rest houses, 
pension houses, inns, resorts; proprietors or operators 
of restaurants, refreshment parlors, cafes and other eating places, 
including clubs and caterers; dealers in securities; lending investors; 
transportation contractors on their transport of goods or cargoes, including 
persons who transport goods or cargoes for hire and other domestic 
common carriers by land relative to their transport of goods or cargoes, 
common carriers by air and sea relative to their transport of passengers, 
goods or cargoes from one place in the Philippines to another place in the 
Philippines; sales of electricity by generation companies, transmission by 
any entity, and distribution companies, including electric cooperatives; 
services of franchise grantees of electric utilities, telephone and telegraph, 
radio and television broadcasting and all other franchise grantees except 
those under Section 119 of this Code and non-life insurance companies 
(except their crop insurances AND MICROINSURANCES), including 
surety, fidelity, indemnity and bonding companies; and similar services 
regardless of whether or not the performance thereof calls for the exercise 
or use of the physical or mental faculties. The phrase 'sale or exchange of 
services' shall likewise include: 
7828


"x x x." 
 
SECTION 2. Section 109 of the NIRC, as amended, is hereby further amended to read as 
follows: 
"Sec. 109. Exempt Transactions. - (1) Subject to the provisions of 
Subsection (2) hereof, the following transactions shall be exempt from the 
value-added tax: 
 
"(A) xxx 
"xxx; 
 
"(AA) Sale of drugs and medicines prescribed for diabetes, high 
cholesterol, and hypertension beginning January 1,2019; [and] 
 
"(BB) Sale or lease of goods or properties or the performance of 
services other than the transactions mentioned in the preceding 
paragraphs, the gross annual sales and/or receipts do not exceed the 
amount of Three million pesos (P3,000,000)[.] AND 
 
"(CC) SALE OF MICROINSURANCE PRODUCTS OR SERVICES 
BY 
AN 
INSTITUTION, 
ORGANIZATION, 
COMPANY 
AND/OR 
ASSOCIATION DULY CERTIFIED BY THE INSURANCE COMMISSION." 
 
SECTION 3. Section 123 of the NIRC, as amended, is hereby further amended to read as 
follows: 
"Sec. 123. Tax on Life Insurance Premiums. - There shall be collected from 
every person, company or corporation (except purely cooperative 
companies or associations) doing life insurance business of any sort in the 
Philippines a tax of two percent (2%) of the total premium collected 
EXCEPT PREMIUMS ON MICROINSURANCE, whether such premiums 
are paid in money, notes, credits or any substitute for money; but premiums 
refunded within six (6) months after payment on account of rejection of risk 
or returned for other reason to a person insured shall not be included in the 
taxable receipts; nor shall any tax be paid upon reinsurance by a company 
that has already paid the tax; nor upon premiums collected or received by 
any branch of a domestic corporation, firm or association doing business 
outside the Philippines on account of any life insurance of the insured who 
is a nonresident, if any tax on such premium is imposed by the foreign 
country where the branch is established nor upon premiums collected or 
received on account of any reinsurance, if the insured, in case of personal 
insurance, resides outside the Philippines, if any tax on such premiums is 
imposed by the foreign country where the original insurance has been 
issued or perfected; nor upon that portion of the premiums collected or 
received by the insurance companies on variable contracts, in excess of 
the amounts necessary. to insure the lives of the variable contract owners. 
 
"Cooperative companies or associations are such as are conducted by the 
members thereof with the money collected from among themselves and 
solely for their own protection and not for profit." 
 
SECTION 4. Section 183 of the NIRC, as amended, is hereby further amended to read as 
follows: 
"Sec. 183. Stamp Tax on Life lnsurance Policies. - On all policies of 
insurance or other instruments by whatever name the same may be called, 
whereby any insurance shall be made or renewed upon any life or lives, 


EXCEPT ON MICR0INSURANCE, there shall be collected a one-time 
documentary stamp tax at the following rates: 
 
If the amount of insurance does not exceed P100,000 
 
 
 
Exempt 
If the amount of insurance exceeds P100,000 but does not exceed P300,000 
P20.00 
If the amount of insurance exceeds P300,000 but does not exceed P500,000 
P50.00 
If the amount of insurance exceeds P500,000 but does not exceed P750,000 
P100.00 
If the amount of insurance exceeds P750,000 but does not exceed P1,000,000 
P150.00 
If the amount of insurance exceeds P1,000,000 
 
 
 
 
P200.00 
 
SECTION 5. Section 184 of the NIRC, as amended, is hereby further amended to read as 
follows: 
"Sec. 184. Stamp Tax on Policies of lnsurance Upon Property. - On all 
policies of insurance or other instruments by whatever name the same may 
be called, by which insurance shall be made or renewed upon property of 
any description, including rents or profits, against peril by sea or on inland 
waters, or by fire or lightning, EXCEPT ON MICROINSURANCE, there 
shall be collected a documentary stamp tax of Fifty centavos (P0.50) on 
each Four pesos (p4.00), or fractional part thereof, of the amount of 
premium charged: Provided, however, That no documentary stamp tax 
shall be collected on reinsurance contracts or on any instrument by which 
cession or acceptance of insurance risks under any reinsurance agreement 
is effected or recorded." 
 
SECTION 6. Section 185 of the NIRC, as amended, is hereby further amended to read as 
follows: 
"Sec. 185. Stamp Tax on Fidelity Bonds and Other lnsurance Policies. - On 
all policies of insurance or bonds or obligations of the nature of indemnity 
for loss, damage or liability made or renewed by any person, association, 
company or corporation transacting the business of accident, fidelity, 
employer's liability, plate, glass, steam, boiler, burglar, elevator, automatic 
sprinkler, or other branch of insurance (except life, marine, inland, [and] fire 
insurance, AND MICROINSURANCE), and all bonds, undertakings, or 
recognizances, conditioned for the performance of the duties of any office 
or position, for the doing or not doing of anything therein specified, and on 
all obligations guaranteeing the validity or legality of any bond or other 
obligations issued by any province, city, municipality, or other public body 
or organization, and on all obligations guaranteeing the title to any real 
estate, or guaranteeing any mercantile credits, which may be made or 
renewed by any such person, company or corporation, there shall be 
collected a documentary stamp tax of Fifty centavos (P0.50) on each Four 
pesos (P4.00), or fractional part thereof, of the premium charged." 
 
SECTION 7. Section 186 of the NIRC, as amended, is hereby further amended to read as 
follows: 
"Sec. 186. Stamp Tax on Policies of Annuities and Pre-Need Plans. – On 
all policies of annuities, or other instruments by whatever name the same 
may be called, whereby an annuity may be made, transferred or redeemed, 
EXCEPT ON MICROINSURANCE, there shall be collected a documentary 
stamp tax of One Peso (P1.00) on each Two hundred pesos (P200), or 
fractional part thereof, of the premium or installment payment on contract 
price collected. On pre-need plans, the documentary stamp tax shall be 
Forty centavos (P0.40) on each Two hundred pesos (P200), or fractional 
part thereof, of the premium or contribution collected." 
 


SECTION 8. Section 187 of the NIRC, as amended, is hereby further amended to read as 
follows: 
“Sec. 187. Stamp Tax on Indemnity Bonds. - On all bonds for indemnifying 
any person, firm or corporation who shall become bound or engaged as 
surety for the payment of any sum of money or for the due execution or 
performance of the duties of any office or position or to account for money 
received by virtue thereof, and on all other bonds of any description, except 
such 
as 
may 
be 
required 
in 
legal 
proceedings 
AND 
ON 
MICROINSURANCE, or are otherwise provided for herein, there shall be 
collected a documentary stamp tax of Thirty centavos (P0.30) on each Four 
pesos (P4.00), or fractional part thereof, of the premium charged." 
 
SECTION 9. Implementing Rules and Regulations. – Within thirty (30) days from the effectivity 
of this Act, the Secretary of Finance, upon recommendation of the Commissioner of Internal 
Revenue, shall promulgate the necessary rules and regulations for its effective 
implementation. 
 
SECTION 10. Separability Clause. - If any provision of this Act is held unconstitutional or 
invalid, all other provisions not affected thereby shall remain valid.  
 
SECTION 11. Repealing Clause. -All laws, decrees, executive orders, issuances, rules and 
regulations or parts thereof which are contrary to and inconsistent with this Act are hereby 
repealed, amended or modified accordingly. 
 
SECTION 12. Effectivity. - This Act shall take effect fifteen (15) days after its complete 
publication in the Official Gazette or in a newspaper of general circulation in the Philippines. 
 
Approved,