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First Regular Session

HOUSEBILLNO.__91

Introduced by Representative RAYMOND ADRIAN SALCEDA

AN ACT
EXCLUDING NON-COMMERCIAL DOCUMENTS FROM THE IMPOSITION OF
DOCUMENTARY STAMP TAX, AMENDING SECTIONS 173, 185, 189, 190, 191,
193, AND 196 OF THE NATIONAL INTERNAL REVENUE CODE OF 1997, AS
AMENDED

EXPLANATORY NOTE

The documentary stamp tax (DST) is a transaction-based tax levied on documents that
record or give effect to certain legal or commercial acts. While originally intended to serve as
a revenue-generating mechanism targeting financial and property transactions, the DST in its
current form often imposes burdens on administrative and non-commercial acts that neither
involve consideration nor produce commercial gain.

This bill seeks to amend Sections 173, 185, 189, 190, 191, 193, and 196 of the National
Internal Revenue Code of 1997, as amended, to exempt non-commercial documents from DST.
These include:

Academic and educational certificates such as diplomas and transcripts;

Civil status documents such as birth, marriage, and death certificates;

Clearances for employment or personal use, such as police and NBI clearances;
Proxies and powers of attomey executed for personal or religious purposes;

Deeds of donation or familial land transfers without pecuniary consideration; and
Other instruments issued for compliance or identification purposes, rather than to
record financial transactions.

eee eee

The current catch-all imposition under Section 185, as well as vague coverage in
Sections 189, 190, 191, 193, and 196, often results in DST being levied on individuals in purely
personal or documentary situations. For example, students are charged DST on diplomas;
families on deeds of donation; and job applicants on clearances—all without these transactions
involving financial consideration or commerce. This violates the principle that the DST should
be a tax on commercial instruments, not life events or routine administrative compliance.

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According to the Bureau of Internal Revenue (BIR) Annual Report for 2022, total DST
collections amounted to P116,3 billion, Over 97% of this amount was derived from financial
instruments such as debt securities, share issuances, bank checks, insurance policies, and real
estate transfers. The remaining 3%, or approximately P3.5 billion, came from residual or
miscellaneous documents, including certificates, powers of attorney, proxies, and other
administrative documents.

However, this bill only exempts non-commercial documents—meaning the actual
revenue impact is far smaller. Based on policy simulation and historical patterns, the revenue
foregone would likely fall within the range of P500 million to P800 million annually.

This bill therefore:

«Preserves the fiscal integrity of the DST system by maintaining all taxes on commercial
and financial documents;
Protects taxpayers from regressive levies on personal and administrative acts;

© Simplifies DST administration by narrowing the scope to documents with clear
monetary consideration; and

« Reinforces the DST’s original intent as a tax on economic transactions—not personal
events.

In view of the foregoing, the immediate approval of this measure is earnestly sought.

RAYMO! IRIAN S. A

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Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

Twentieth Congress
First Regular Session

HOUSE BILL NO. 51

Introduced by Representative RAYMOND ADRIAN SALCEDA.

AN ACT
EXCLUDING NON-COMMERCIAL DOCUMENTS FROM THE IMPOSITION OF
DOCUMENTARY STAMP TAX, AMENDING SECTIONS 173, 185, 189, 190, 191,
193, AND 196 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 173 of the National Internal Revenue Code of 1997, as amended,
is hereby further amended to read as follows:

SEC. 173. Stamp Tax Upon Documents, Instruments, Loan
Agreements and Papers. ~ There shall be levied, collected and paid for
every document, instrument, loan agreement, and paper specified in
Sections 174 to 196 hereof, a documentary stamp tax as imposed in the said
sections:

PROVIDED, THAT NO DOCUMENTARY STAMP TAX
SHALL BE IMPOSED UNDER THIS TITLE ON DOCUMENTS,
INSTRUMENTS, OR PAPERS THAT DO NOT EVIDENCE,
RECORD, OR EFFECT A COMMERCIAL OR FINANCIAL
TRANSACTION.

SEC. 2. Section 185 of the same Code is hereby further amended to read as follows:

SEC. 185. Stamp Tax on Certificates. - On each certificate of
damage or otherwise, and on every other certificate or document issued by
any customs officer, marine surveyor, or other person acting as such, and
on each certificate of any description required by law or by rules or
regulations of a public office, or which is issued for the purpose of giving
information, or establishing proof of a fact, and not otherwise specified

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herein, there shall be collected a documentary stamp tax of Fifteen pesos
(P15.00):

PROVIDED, THAT THIS SECTION SHALL NOT APPLY TO
CERTIFICATES ISSUED SOLELY FOR ACADEMIC,
EDUCATIONAL, OR PERSONAL IDENTIFICATION PURPOSES,
INCLUDING BUT NOT LIMITED TO DIPLOMAS, TRANSCRIPTS
OF RECORDS, CERTIFICATES OF GRADUATION, BIRTH
CERTIFICATES, MARRIAGE CERTIFICATES, DEATH
CERTIFICATES, POLICE CLEARANCES, AND NBI
CLEARANCES, AND OTHER DOCUMENTS NOT CONNECTED
TO A COMMERCIAL OR FINANCIAL TRANSACTION.

SEC. 3. Section 189 of the same Code is hereby further amended to read as follows:

SEC. 189. Stamp Tax on Proxies. ~ On each proxy for voting at any
election for officers of any company or association, or for any other
purpose, there shall be collected a documentary stamp tax of Fifteen pesos
(P15.00):

PROVIDED, THAT THIS SECTION SHALL NOT APPLY TO
PROXIES THAT DO NOT CONFER OR EFFECT CONTROL
OVER COMMERCIAL, FINANCIAL, OR CORPORATE
INTERESTS.

SEC. 4. Section 190 of the same Code is hereby further amended to read as follows:

SEC. 190, Stamp Tax on Powers of Attorney. — On each power of
attomey to perform any act or do anything on behalf of the principal, there
shall be collected a documentary stamp tax of Five pesos (P5.00):

PROVIDED, THAT THIS SECTION SHALL NOT APPLY TO
POWERS OF ATTORNEY EXECUTED SOLELY FOR PERSONAL,
MEDICAL, RELIGIOUS, OR FAMILY MATTERS NOT
INVOLVING A COMMERCIAL OR FINANCIAL TRANSACTION.

SEC. 5. Section 191 of the same Code is hereby further amended to read as follows:

SEC. 191. Stamp Tax on Leases and Other Hiring Agreements.—On
each lease, agreement, memorandum, or contract for hire, use, or rent of any
land or tenement, or portion thereof, there shall be collected a documentary
stamp tax based on the rental amount:

PROVIDED, THAT THIS SECTION SHALL NOT APPLY TO
LEASE AGREEMENTS ENTERED INTO EXCLUSIVELY FOR
CHARITABLE, RELIGIOUS, OR PERSONAL NON-
COMMERCIAL PURPOSES WITHOUT MONETARY
CONSIDERATION.

SEC. 6. Section 193 of the same Code is hereby further amended to read as follows:

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SEC. 193. Stamp Tax on Deeds of Sale and Conveyances of Real
Property. — On all conveyances, deeds, instruments, or writings, other than
grants or patents issued by the government, whereby any land, tenement, or
other realty is granted, assigned, transferred, or otherwise conveyed to
another person, there shall be collected a documentary stamp tax at the rates
prescribed under this Title:

PROVIDED, THAT THIS SECTION SHALL NOT APPLY TO
DEEDS OF DONATION, INTRAFAMILY TRANSFERS, OR
OTHER CONVEYANCES EXECUTED WITHOUT PECUNIARY
CONSIDERATION.

SEC. 7. Section 196 of the same Code is hereby further amended to read as follows:

SEC. 196. Stamp Tax on Other Documents, - On all other
documents, instruments, papers, and writings not otherwise specified in this
Title, there shall be collected a documentary stamp tax of Thirty pesos
(30.00):

PROVIDED, THAT NO DOCUMENTARY STAMP TAX
SHALL BE IMPOSED UNDER THIS SECTION ON DOCUMENTS
THAT DO NOT INVOLVE A COMMERCIAL OR FINANCIAL
TRANSACTION.

SEC. 8. Implementing Rules and Regulations. — Within sixty (60) days from the
effectivity of this Act, the Secretary of Finance shall, upon the recommendation of the
Commissioner of Internal Revenue, promulgate the necessary rules and regulations for the
effective implementation of this Act.

SEC. 9. Repealing Clause. — All laws, decrees, orders, rules, and regulations or other
issuances or parts thereof inconsistent with the provisions of this Act are hereby repealed or
modified accordingly.

SEC. 10. Effectivity. - This Act shall take effect fifteen (15) days after its publication
in the Official Gazette or in a newspaper of general circulation.

Approved,

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