Republic of the Philippines
HOUSE OF REPRESENTATIVES

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Constitution Hills, Quezon City

SEVENTEENTH (17™) CONGRESS

First Regular Session

House Bill No. 0399

Introduced by REPRESENTATIVE ERIC L. OLIVAREZ
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EXPLANATORY NOTE

Our world is rapidly transforming itself into a more
modernized society. Alongside this technological advancement,
people now tend to favor transactions that prove to be easier and
more efficiently conducted. Particularly, conducting business
nowadays especially those involving the outflow of earnings, is
benefiting from the modernization we are undergoing. Gone are
the days where people have to have cash ready and available
whenever they need to pay for something. Oftentimes, the very
important needs of an individual such as hospital bills,
medicines, tuition, and other emergency expenses are not being
met by any service or goods provider because of the former’s lack
of cash.

In this day and age, carrying money in our pockets have
more often been regarded as disadvantageous, if not totally
unnecessary. With the birth of credit cards and/or debit cards,

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there is now a safer way of paying almost anything we need. Such
mode of payment has slowly but surely been considered as a
normal and acceptable mode of payment. From its flimsy origins
dating back from 1920s, we have witnessed how the credit card
market boomed and thrived over the years.

Indeed, credit cards have revolutionized the financial habits
and ways of people and have made a significant change in the
world of business as well as in every country’s economy.

There are some basic advantages offered by the use of credit
cards or debit cards as alternative for money. For one, credit or
debit cards cannot be stolen or robbed. Secondly, it is easily
replaceable. Also, the system of credit card payment provides for
a great method for tracking one’s expenses for budgeting’s sake.

Furthermore, banks are required to exercise greater caution
and diligence in their transactions considering that the nature of
their business is imbued with public interest. Hence, banks
provide the cardholder a certain degree of safeguard and
protection on their purchases and possibly even reward points or
cashback when they use their card.

In most countries nowadays, the use of credit cards is now
the mainstream, and this is apparently justified by the benefits
enumerated about. It is about time that we abandon the outdated
method of one very 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 particularly imposed by
the local government units. Using credit cards or debit cards
provides a convenient way to pay one’s taxes due. 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

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their tax obligations properly. Evasion thereof will be avoided if
people know that they do have an alternative to doling out cold
cash, that is - delayed and staggered payment secured by and
made possible through 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.

am 6.0,

ERIC L. OLIVAREZ

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Republic of the Philippines
HOUSE OF REPRESENTATIVES

Constitution Hills, Quezon City

SEVENTEENTH (17™) CONGRESS
First Regular Session

House Bill No. 5399

—
Introduced by REPRESENTATIVE ERIC L. OLIVAREZ

—— ss

AN ACT ALLOWING THE USE OF CREDIT CARDS OR DEBIT
CARDS FOR THE PAYMENT OF REAL PROPERTY TAXES AND
OTHER LOCAL GOVERNMENT-IMPOSED TAXES, CHARGES
AND FEES IN THE PHILIPPINES

Section 1. Short Title. This Act shall be known as the
Credit or Debit Card Payment for LGU 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 real property taxes and any kind of
taxes imposed upon a person by the State through the local
government units to the extent and under the conditions
provided in the implementing rules and regulations prescribed by
the respective local government unit involved.

Section 3, Limitation. The taxpayer may not use or utilize
the credit cards or debit cards issued under the name of a person

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other than himself or herself, for the payment of his or her own
taxes due.

Section 4. Authorization by the Bureau. The local
government unit 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 tax related 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.

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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
local government unit involved.

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 the real property and other local
government-imposed 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 local government unit 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 would not 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 bya
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
Department of Finance and the Department of Interior and Local
Government in coordination with the local government units 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.

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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.

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