FIFTEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPIES 
First Regular Session 
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SENA:,:J;Ij;..a 
S.NJ. 
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Introduced by Sen. Antonio "Sonny" F. Trillan~¥" In' "', 
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EXPLANATORY NOTE 
In line with the government's thrust of increasing and enhancing revenue collection and prevention 
of tax fraud, this bill seeks to implement a simple but effective manner of easily verifYing and/or 
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. This will ensure the 
full accounting and proper documentation of all business and commercial transactions in the 
country. In brief, this bill aims 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. 
In this manner, there would be simple yet fool-proofed way of authenticating and verifying the 
correctness of transactions even by mere naked eye examination. Consequently, tax monitoring and 
collection will be greatly enhanced and strengthened 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 (NTRe) of the Department of Finance 
(DOF), the government's premier think-tank 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 NTRC: 
"It is also expected that the use of watermarked paper in all 
commercial and business transactions could minimize if not completely 
eliminate the use offalsified receipts and other documents." 
In the light of all the foregoing, the immediate consideration and passage of this bill is most 
earnestly sought. 


FIFTEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPIES 
Finit Regular Session 
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SENATE 
S, No. 
363 
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Introduced by Sen. Antonio "Sonny" F. T1'i1I1mI!J!'IVtT I" , 
AN ACT 
REQUIRING ALL GOVERNMENT AGENCIES, INSTRUMENTALITIES, LOCAL 
GOVERNMENT UNITS, AND GOVERNMENT OWNED AND! OR 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 by the Senate and House of Representatives of the Philippines In Congress 
assembled: 
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SECTION 1, Short Title. - This Act shall be known as the "Document Authentication and 
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Security Act of 2010". 
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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; 
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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. - Tlie following definition ofterrns is hereby adopted: 
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(a) "Receipt" is a written admission or acknowledgement of the fact of payment in money 
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or 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 01' commel'Cial invoice or delivel'Y I'eceipts" is a written account of goods ore 
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services rendered and the price charged therefore, or a list of goods consigned and the value at 
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which the consignee is to receive them or any other list by whatever name is known which is used 
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in the ordinary course of business evidencing sale and transfer or agreement to sell or transfer 
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goods 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 watel'marked paper" shall refer to a paper material which bear watermark 
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containing such authorized security feature duly 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 commercial 
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invoices. 
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SEC. 4. Covered Institntions/Establishments. -
All government agencies and 
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instrumentalities, including Government70wned and/or Controlled Corporations, and all Local 
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Government Units and private and commercial establishments, whether corporations, partnerships 
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or sole proprietorships, shall use water-marked paper in all receipts, invoices, [onns, permits, 
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licenses, clearances, official papers and documents which they issue to all natural and juridical 
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persons transacting business with them. 
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SEC. 5. Procef/Ilre for Printing of SeCllrity Watermarked Paper. - The said agencies, 
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GOCCs and LGUs as well as all private establishments shall strictly comply with the implementing 
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rules and regulations (IRR) prescribing the procedures in accordance with which such receipts, 
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invoices, forms, permits, licenses shall be printed, as provided below. The said documents shall be 
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printed on security water-marked paper in accordance with prescribed form and dimensions. 
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SEC. 6. Size and Form of Seclirity Watermarked Paper. - The Department of Finance 
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(DO F), the Bureau of Internal 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 other 
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accountable forms shall, after a period of six (6) months from the effectivity of this Act, all be 
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printed in security water-marked paper: Provided, That any such receipts, invoices, commercial 
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documents, permits, licenses and clearances as well as other accountable forms which remain 
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unused and unconsumed after the lapse of said six-month period may still be used: Provided, 
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jurther, that appropriate inventory thereof as confirmed and approved by the BIR is conducted and: 
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Provided, finally, That, after a period of six (6) months thereafter, the said unused receipts, 
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invoices, permits, licenses and clearances as well as other accountable fonns shall no longer be 
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allowed for use in any transaction in the Philippines. 
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SEC. 8. Pellalty. - Any person who fails to comply with the requirements of this Act, 
including the parties involved in a transaction where the use of security water-marked paper is 
prescribed, as well as government functionaries involved in the monitoring of regulating these 
transactions, shall be subject to all the appropriate sanctions and penalties provided for in the 
National Internal Revenue Code and other pertinent laws, rules and regulations. 
SEC. 9. Implemelltillg Agellcy. - The Secretary of the Department of Finance, upon the 
recommendation of the Commissioner ofInternai Revenue and the Commissioner of Customs, shall 
immediately promulgate and adopt the appropriate implementing rules and regulations (IRR) ofthis 
Act. Said IRR shall include the identification and setting of the standards upon which the security 
watermarked paper shall be sourced and supplied and such other details as would be necessary and 
appropriate for the effective implementation of this Act. 
SEC. 10. Separability Clause. - If for any reason any provision of this Act is declared 
unconstitutional or invalid, the remainder or any provisions hereof not affected thereby shall remain 
in full force and effect. 
SEC. 11. Repealillg Clause. - The provisions of any law, executive orders, presidential 
decrees or other issuances inconsistent with this Act are hereby repealed or modified accordingly. 
SEC. 12. Effectivity. - This Act shall take effect fifteen (15) days after its complete 
publication in the Official Gazette and in at least two (2) newspapers of general circulation. 
Approved, 
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