ek OF R SPRESENTATIVES:

Republic of the Philippines | RECEIVED
HOUSE. ae ica cat pave 06 SEP 2015
pile Regi Sek PY
HOUSE BILL No, 8482 RERISTR ATION UNIT

BILLS AND INDEX SERVICE

Introduct

ERO.

1 by REP. EVELINA G.

EXPLANATORY NOTE

The Constitutional mandate that taxation be just, fair, equitable, and reasonable cannot be
more profound than when taken in context of today’s looming economic reality. Faced with the
current situation of the economy, any tax reform effort and revenue scheme should not only be
judged according to its fiscal adequacy, equity, and administrative feasibility, but more importantly
its impact on poverty, income distribution, and economic growth.

Recent amendments to the National Internal Revenue Code as amended, are proof positive
that the legislature has, in fact, taken this stance. Both houses of congress are pushing for legislative
measures that will provide relief to the taxpayers, recognizing that taxation is not solely about
raising revenues, but is also to accomplish some desirable non-revenue or social objectives

This bill proposes that documents evidencing the receipt of personal property as security for
the payment of certain sum of money. i.e. a contract of pledge, where the loaned amount does not
exceed ten thousand pesos (Php10,000.00) be exempt from payment of the documentary stamp tax
(DST).

Passage of this bill is justified by the reality that the transactions of this value ordinarily and
regularly occur among those belonging to the marginalized sectors of our society. Finding
themselves in dire financial situation, they resort to pledging their personal properties in order to
borrow money from individuals and/or lending institutions. Because the Tax Code is indifferent on
whose liability the payment of DST falls, it is often absorbed by the one making the pledge as a
part of the cost of the loan transaction, This is ironic because while the pledge is the one pressed for
cash, he still has to cut a share of the proceeds of the loan to pay for the DST,

In this context, the urgent approval of this bill is eamestly recommended.

Gentil

EVELINA G. ESCUDERO


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

17" CONGRESS
First Regular Session

HOUSE BILL NO. 3482

Introduced by REP. EVELINA G,

SCUDERO

AN ACT
EXEMPTING PLEDGE OF PERSONAL PROPERTY COVERING A LOAN OF MONEY
NOT EXCEEDING TEN THOUSAND PESOS FROM DOCUMENTARY STAMP TAX,
‘AMENDING FOR THE PURPOSE SECTION 199 OF THE NATIONAL INTERNAL
REVENUE CODE OF 1997, AS AMENDED

Be it enacted by the Senate and the House of Representatives of the Republic of the
Philippines in Congress assembled.

§ ON 1. Section 199 of the National Internal Revenue Code of 1997, as amended, is
hereby further amended to read as follows:

XXX

EC. 199. Documents and papers Not Subject to Stamp Tax ~ XX X
XXX

(0) DOCUMENTS OR OTHER PAPERS EVIDENCING THE RECEIPT OF
PERSONAL PROPERTY AS SECURITY FOR THE PAYMENT OF ANY
DEFINNITE AND RTAIN SUM OF MONEY WHERE THE PRINCIPAL
AMOUNT LOANED DOES NOT EXCEED 1 THOUSAND PESOS (Php
10,000.00).”

*. 2. Implementing Rules and Regulations ~ The Seeretary of Finance shall, upon the
recommendation of the Commissioner of Internal Revenue, promulgate and publish the necessary
rules and regulations for the effective implementation of this Act,

SEC. 3. Repealing Clause — All laws, decrees, executive order

parts thereof which ate inconsistent with this Act, are hereby rep
accordingly

rules and regulations or
amended or modified

SEC. 4, Effectivity ~ This Act shall take et fifteen (15) days after its publication in the

Official Gazette or in any two (2) newspapers of general circulation

Approved,