REPUBLIC OF THE PHILIPPINES
HOUSE OF REPRESENTATIVES
Quezon City

SEVENTEENTH CONGRESS
Second Regular Session

House Bill No, 6629

"Introduced by MAGDALO Party List Representative
Hon. Gary C. Alejano

EXPLANATORY NOTE

country

This bill proposes the use of specialized oF watermarked security paper on which all receipts, invoices,
permits, lcenses. clearances and all other official papers and doctors issued by both the government as
Dail as private entities shall be printed. Consequently. the adoption of such legislation will wreatly
enhance and strengthen tax monitoring and collection If the wan of security watermarked paper for all
receipts and other documents will be made mandatory requirement for all commercial and business
transactions

I should be noted that he National Tax Research Center (NTRC) of the Department of Finance (DOF),
the government's lead agency when it comes to taxation, has exprossed ne Support and full backing for the
Fret ato use water-marked paper in ull receipts and similar documents hope issued by stute agencies,
local government units and even private and commercial establichennr, The NTRC said this move
Tens reuhanee and strengthen the tax monitoring and collection functions or ire government. To quote
the NTRCI',

jit i also expected that the use of watermarked paper in all commercial and business
Cohen neat coud minimize {f wot completely eliminate the use of falsified receipts and
‘other documents.”

{nthe light of all the foregoing, the immediate consideration and of this bill is most earnestly
sought.

_—— ar
c Please see the ante: "Use of water-matied paper for receipts hacked Philippine Star - duty % 2008 See aber
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REPUBLIC OF THE PHILIPPINES
HOUSE OF REPRESENTATIVES,
Quezon City
SEVENTEENTH CONGRESS

Sccond Regular Session
6629

House Bill No.

Introduced by MAGDALO Party List Representative
Hon. Gary C. Alejano

AN ACT
REQUIRING ALL GOVERNMENT AGENCIES, INSTRUMENTALITIES, LOCAL
GOVERNMENT UNITS, AND GOVERNMENT OWNED AND 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 in the Senate and House of Representatives of the Philippines in Congress
assembled

SECTION 1. Short Title. ~ This Act shall be known as the "Document Authentication
‘and Security Act”.

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4 SEC. 2. Declaration of Policy. - itis hereby declared the policy of the Suate to:
$ (a) Enhance tax monitoring and collection;

6 (b) Increase revenue collection; and

7 (c) Avoid tax fraud and graft and corruption in the tax collection efforts.

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SEC. 3, Definition of Terms. - The following definition of terms is hereby adopted:
10 (a) “Receipt” iss written admission or acknowledgement of the fact of payment in money or
11 other settlement between seller and buyer of goods, debtor and creditor, or person rendering
12 services and client or customer printed in accordance with these regulations.
13 (b) "Sales or commercial invoice or delivery receipts” is a written account of goods or services
14 rendered and the price charged therefore, or a list of goods consigned and the value at which the
15 consignee is to receive them or any other list by whatever name is known which is used in the
16 ordinary course of business evidencing sale and transfer or agreement to sell or transfer goods


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and service, e.g. purchase orders, delivery receipts, job orders, provisional and temporary
receipts, and others;
(c) "Security watermarked paper” shall refer to a paper material which bear watermark

containing such authorized security feature duly etched and embedded in the paper during its
manufacturing process. It is especially designed for the printing of receipts or sales or

commercial invoices.

SEC, 4, Covered Institutional Establishments. - All government agencies and
instrumentalities, including Government-Owned and/or Controlled Corporations, and all Local
Government Units and private and commercial establishments, whether corporations,
partnerships or sole proprietorships, shall use water-marked paper in all receipts, invoices, forms,
permits, licenses, clearances, official papers und documents which they issue to all natural and

juridical persons transacting business with them,

SEC. §. Procedure for Printing of Security Watermarked Paper. ~ The said agencies,
GOCCs and LGUs as well as ull private establishments shall strictly comply with the
implementing rules and regulations (IRR) prescribing the procedures in accordance with which
such receipts, invoices, forms, permits, licenses shall be printed, as provided below. ‘The said
documents shall be printed on security water-marked paper in accordance with prescribed form

and dimensions,

SEC. 6. Size and Form of Security Watermarked Paper, - The Department of Finance
(DOF), the Bureau of Internal Revenue (BIR) and the Bureau of Customs (BOC) shall prescribe

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

commercial transactions in the Philippines.

SEC. 7. Covered Forms. - All receipts, invoices, permits, licenses and clearances and
other accountable forms shall, after a period of six (6) months from the effectivity of this Act,
shall be printed in security water-marked paper: Provided, That any such receipts, invoices,
commercial documents, permits, licenses and clearances as well as other accountable forms
which remain unused and unconsumed after the lapse of said six-month period may still be used:
Provided, further, That appropriate inventory thereof as confirmed and approved by the BIR is
conducted und: Provided, finally, That, after a period of six (6) months thereafter, the said unused
receipts, invoices, permits, licenses and clearances us well us other accountable forms shall no

Jonger be allowed for use in any transaction in the Philippines.

SEC. 8. Penalty. - 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 Intemal Revenve Code and other pertinent laws, rules and regulations.

SEC. 9. Implementing Agency. - The Secretary of the Department of Finance, upon the
recommendation of the Commissioner of Internal Revenue and the Commissioner of Customs,
shall immediately promulgate and adopt the appropriate implementing rules and regulations
(IRR) of this 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. Repealing 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 Clause. - This Act shall take effect fifteen (15) days after its
complete publication in the Official Gazene and in at least two (2) newspapers of general

circulation,

Approved,