Republic of the Philippines
HOUSE OF REPRESENTATIVES
Constitution Hills, Quezon City

SIXTEENTH (16) CONGRESS
Second Regular Session

House Bill No, 5095

Introduced by REPRESENTATIVE ERIC L. OLIVAREZ

EXPLANATORY NOTE

In the advent of modernity, every trade or transaction
conducted by men has undergone certain changes and
developments which all ultimately bring about a safer, easier and
more efficient way of conducting business. In this day and age,
carrying money in our pockets have more often been regarded as
less advantageous, if not totally unnecessary. Other safer means
such as the use of credit cards or debit cards has already been
considered as acceptable modes of payment.

From its scanty origins tracing back to the 1920s, we have
witnessed how the credit card market boomed and thrived over
the years. The computerization and digitalization of the global
society is in large part the reason for the worldwide acceptance of
credit cards or debit cards as an alternative for money. Indeed,
credit cards have revolutionized the financial habits of people and
have made a significant change in the world of business as well
as in every country’s economy. Credit cards or debit cards
represent an integral part of our lives- from the smallest unit of
the society which is a household to the largest conglomeration of
global activities.


People all around the world conduct their day to day
activities using cards instead of money. For one, cards are safer
to carry around as it cannot be stolen or robbed. Secondly, even
if one loses it, it is easily replaceable. Also, the credit card system
offer a great method for tracing one’s expenses. Banks are
usually very cautious about credit card transactions and they
provide the cardholder a certain degree of safeguard by notifying
the latter of transactions beyond his or her normal spending.

In most of the western countries, the use of credit cards by
almost all adults especially the professionals for almost all of
their transactions is now the mainstream, obviously for good
reasons. It is about time that we also revolutionize the outdated
method of one important transaction every citizen in our own
country makes, or is bound to make- the payment of taxes.

Through this bill, the use of credit cards or debit cards will
become an acceptable way to pay taxes. Using credit cards or
debit cards provides a convenient way to pay one’s taxes due and
has several disadvantages such as (1) the flexibility to pay credit
card balances over time (2) the possible rewards coming from
from card issuers; and lastly, (3) the assurance that the tax
payment has been made through a trusted institution. On the
other hand, the State will also benefit from the fact that it may
now collect from banks issuing such cards which have sufficient
funds and a better capacity of paying.

In a way, allowing the use of credit cards or debit cards for
the payment of taxes will also encourage more individuals to pay
their tax obligations properly. Evasion thereof will be lessened if
people will have an alternative, that is - delayed payment secured
by the credit card system. In such a scenario, the State will have
no problem collecting from every taxable individual what is due of
them as it can directly collect from his or her issuing bank or
financial institution. The bank on the other hand, will have no
trouble collecting the accumulated credit card debt from its
individual cardholders because it has been expertly doing this
practice for decades now.


Clearly, allowing the use of credit cards or debit cards
serves as a win-win situation for all the parties involved. Hence,
the approval of this bill is being persistently sought.

aw ¢ Or”,

ERIC L. OLIVAREZ


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Constitution Hills, Quezon City

SIXTEENTH (16%) CONGRESS
Second Regular Session

5085

House Bill No.

Introduced by REPRESENTATIVE ERIC L. OLIVAREZ

AN ACT ALLOWING THE USE OF CREDIT CARDS OR DEBIT
CARDS FOR THE PAYMENT OF TAXES IN THE PHILIPPINES

Section 1. Short Title. This Act shall be known as the
Credit or Debit Card Payment for Taxes of 2014.

Section 2. Credit or Debit Cards as Commercially
Acceptable Means of Payment of Taxes. The use of credit
cards or debit cards shall now be considered commercially
acceptable means of paying any kind of taxes imposed upon a
person by the State to the extent and under the conditions
provided in the implementing rules and regulations prescribed by
the Bureau of Internal Revenue.

Section 3. Limitation. The taxpayer may not use or utilize
the credit cards or debit cards issued under the name of a person
other than himself or herself, for the payment of his or her own
taxes due.

Section 4. Authorization by the Bureau. The Bureau of
Internal Revenue may authorize select companies to process


credit and debit cards on its behalf, and these companies may
charge taxpayers a reasonably and regulated amount of
processing fee.

Section 5. Confidentiality. No person may use or disclose
any information relating to credit or debit card transactions
obtained pursuant to this Act other than for purposes directly
related to the processing of such transactions, or the billing or
collection of amounts charged or debited pursuant thereto.

Section 6. Exceptions to the Confidentiality Rule.
Section 3 of this Act may admit of certain exceptions, to wit:

(A) Debit or credit card issuers or others acting on behalf of
such issuers may also use and disclose such information for
purposes directly related to servicing an issuer's accounts.

(B) Debit or credit card issuers or others directly involved in
the processing of credit or debit card transactions or the billing or
collection of amounts charged or debited thereto may also use
and disclose such information for purposes directly related to—

(1) statistical risk and profitability assessment;

(2) transferring receivables, accounts, or interest
therein;

(3) auditing the account information; and

(4) complying with the laws of the Philippines or
any valid court order pursuant to a criminal
investigation.

Provided, that the use and disclosure of information under
this paragraph shall be made only to the extent authorized by
written procedures, rules and regulations promulgated by the
Bureau of Internal Revenue.


Section 7. Ultimate Solidary Liability of Tax Payer and
Issuing Bank. When for any reason the use of credit cards or
debit cards in the payment of taxes proved to (1) have been done
fraudulently or in contravention or circumvention of any law
especially to evade tax obligations, the taxpayer shall be solidarily
liable with the bank which issued the credit card for the actual
and complete payment of taxes due, without prejudice to the
filing by the Bureau of Internal Revenue of civil, criminal and/or
administrative charges against any person or persons conniving
for the purpose of evading taxes due. On this note, an
individual’s bankruptcy won't discharge credit card debt incurred
from taxes.

Section 8. Liability of Guaranteeing Banks. If the credit
card and/or debit card which has been guaranteed expressly by a
bank or any financial institution, is not duly paid, the State shall,
in addition to its right to exact payment from the party originally
indebted therefor, have a lien for the guaranteed amount of the
transaction upon all the assets of the institution making such
guarantee, and such amount shall be paid out of such assets in
preference to any other claims whatsoever against such
guaranteeing financial institution.

Section 9. Implementing Rules and Regulations. The
Bureau of Internal Revenue shall promulgate the Implementing
Rules and Regulations to carry out the provisions of this Act.
Such rules and regulations shall take effect upon their
publication in three (3) newspapers of general circulation.

Section 10. Repealing Clause.- All laws, presidential
decrees, letters of instructions, executive orders, rules and
regulations insofar as they are inconsistent with this Act, are
hereby repealed or amended as the case may be.

Section 11. Separability Clause. - In the event that any
provision of this Act or any portion thereof is declared
unconstitutional by a competent court, the other provisions shall
not be affected thereby and shall remain valid and enforceable.


Section 12. Effectivity Clause. - This Act shall take effect
after its complete publication in at least three (3) newspapers of
general circulation.

APPROVED.