House okays bill exempting loans up to P10,000 from documentary stamp tax
Speaker Prospero Nograles, principal author of House Bill 5314, said the measure would benefit workers and poor families feeling the pinch of the global economic crisis.
“This bill proposes that documents evidencing the receipt of personal property as security for the payment of certain sum of money like a contract of pledge, where the loaned amount does not exceed P10,000 be exempted from payment of documentary stamps,” he said.
“With the prevailing money crisis, it is expected many people will pledge or pawn, so let’s not burden the people with documentary stamps anymore as the government’s help in times of crisis,” he said.
He added that poor people usually pawn their personal properties such as appliances and jewelry in exchange for small amounts.
Under the National Internal Revenue Code, the DST is P1 for every P200 or a fraction thereof of the value of the loan.
Other taxes and financing charges, however, would have to apply on the loan.
Nograles said he expects his bill to be approved by the House soon.
“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,” he said. — Jess Diaz
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