REPUBLIC OF THE PHILIPPINES
HOUSE OF REPRESENTATIVES
Quezon City. Metro manila

FIFTEENTH CONGRESS,
First Regular Session

House Bill 8210

Introduced by Representatives Mariano Michael M. Velarde Jr. and William
Irwin Tieng (BUHAY Party List)

EXPLANATORY NOTE

The government has through all the years been formulating multitudinous
schemes and programs, ranging from raffle of receipts to shaming of celebrities and
known personalities for the purpose of increasing revenue collection. But apparently,
all these efforts failed for one reason or another.

In line with the government’s thrust of increasing and enhancing revenue
collection and prevention of tax fraud, this bill seeks to require documentation of
receipts, invoices, permits, licenses, clearances and official papers that will ensure
the full accounting and proper documentation of all business and commercial
transactions in the country.

This bill involves the use of security paper upon which receipts. invoices,
permits, licenses, clearances and all other official papers and documents used by
government and private entities are printed. The paper upon which these documents
are printed shall be “watermarked” and shall bear the seal of the collecting agencies
like the Bureau of Internal Revenue (BIR) and the Bureau of Customs (BOC). In this
manner, a fool-proofed way of documenting and verifying the correctness of
transactions by mere naked eye examination can be done. Consequently, tax
monitoring and collection will be greatly enhanced and strengthened if the use of
security water-marked papers in all receipts and other documents will be made a
mandatory requirement in all commercial and business transactions. This will
minimize, if not completely eliminate, the use of falsified receipts and other

documents in all commerci: business noe)



WILLIAM IRWIN TIENG

REPUBLIC OF THE PHILIPPINES
HOUSE OF REPRESENTATIVES
Quezon City. Metro manila

FIFTEENTH CONGRESS
First Regular Session

House Bill__ 8230

Introduced by Representatives Mariano Michael M. Velarde Jr. and William
Irwin Tieng (BUHAY Party List)

“AN ACT REQUIRING ALL GOVERNMENT — AGENCIES,
INSTRUMENTALITIES, LOCAL GOVE NT UNITS, AND
GOVERNMENT OWNED AND/ OR CONTROLLED CORPORATIONS
(GOCCs) AND ALL 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 the House of Representatives of the
Philippines in Congress assembled:

SECTION 1. Short Title. - This Act shall be known as the “Security Water-
Marked Documents Act of 2010.”

SEC. 2. Declaration of Policy. — It is hereby declared the policy of the State
to:

(a) Enhance tax monitoring and collection;

(b) Increase revenue collection;

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

SEC. 3. Definition of Terms. - The following definition of terms is hereby
adopted:

(a) “Receipt” is a written admission or acknowledgement of the fact of
payment in money, goods, chattels or other settlement between seller and buyer of
goods, debtor and creditor, or person rendering services printed in accordance with
this Act.


(b) “Sales or commercial invoice or delivery receipt” is a written account
of goods or services rendered and the price charged therefor, or a list of goods
consigned and the value at which the consignee is to receive them or any other list by
whatever name is known which is used in the ordinary course of business evidencing
sale and transfer or agreement to sell or transfer of goods and services, e.g. purchase
orders, delivery receipts, job orders, provisional and temporary receipts, and others;

(c) “Security water-marked paper” shall refer to a paper material which bear
tamper proof water-mark containing such authorized security features, attributes or
qualities duly etched and embedded in the paper itself during its manufacturing
process. It is especially designed for the printing of receipts or sales or commercial
invoices and other documents contemplated under this Act..

SEC. 4. Covered Institutions/Establishments. — All government agencies
and instrumentalities, including Government-Owned and/or Controlled Corporations,
and all Local Government Units and private and commercial establishments, shall
use water-marked paper in all receipts, invoices, forms, permits, licenses, clearances,
official papers and documents which they issue to all natural and juridical persons
transacting business with them.

SEC. 5. Procedure for Printing of Security Water-Marked Paper. — The
said agencies, GOCCs and LGUs shall develop procedures such that receipts,
invoices, forms, permits, licenses and clearances, whenever applicable and possible,
shall be printed on security water-marked paper, the sizes and forms of which shall
be uniform.

SEC. 6. Size and Form of Security Water-Marked 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 uniform sizes and forms of security
water-marked paper to be used for all transactions in the Philippines.

SEC. 7. Covered Forms. — All receipts, invoices, permits, licenses and
clearances shall, after a period of six (6) months from the effectivity of this Act, be
printed in security water-marked paper: Provided, That any such receipts, invoices,
commercial documents, permits, licenses and clearances 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 and: Provided, finally, That, after a period of six (6) months thereafter, the
said unused receipts, invoices, permits, licenses and clearances shall no longer 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 functionary involved in the

3


monitoring or 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. Implementing Agency. — The Secretary of the Department of
Finance, upon the recommendation of the Commissioner of Internal Revenue and the
Commissioner of Customs, shall promulgate appropriate rules and regulations,
including the identification and setting of the standards upon which the security
water-marked 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 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. - This Act shall take effect fifteen (15) days after its

complete publication in the Official Gazette or in at least two (2) newspapers of
general circulation.

Approved.

VQ

RIANO MICHAEL M. VELARDE Jr.

WILLIAM IRWIN TIENG