THIRD DIVISION
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CHINA BANKING CORPORATION, Petitioner,
- versus - THE
COMMISSIONER OF INTERNAL REVENUE, Respondent. |
G.R. No. 172359 Present:
Ynares-Santiago, J., Chairperson, CHICO-NAZARIO, velasco, jr., LEONARDO-DE CASTRO,*and PERALTA, JJ. Promulgated: October 2, 2009
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I O N PERALTA, J.: |
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Before this Court is a Petition for
Review on Certiorari[1] under Rule 45 of the Rules of Court
seeking to set aside the January 3, 2006 Decision[2] and
March 20, 2006 Resolution[3] of
the Court of Tax Appeals (CTA) En Banc in C.T.A. EB No. 66 (C.T.A Case No. 6400).
The facts of the case.
Petitioner China Banking Corporation,
a universal banking corporation duly organized and existing under and by virtue
of the laws of the Republic of the
On
On
Subsequently, petitioner received a
Final Assessment Notice (FAN) dated
For
the year 1994
A. Reverse Repurchase Agreements P 424,000,000.00
B. Special Savings Accounts 2,142,305,326.67
----------------------
Total 2,566,305,326.67
Rate of Tax 0.15% ----------------------
Total Tax due thereon 3,849,457.98
Add:
25% Surcharge 962,364.50
Compromise Penalty 25,000.00 987,364.50
---------------- ---------------------
Total Deficiency DST-Industry Issue P4,836,822.48[7]
For
the year 1995
A.
Reverse Repurchase Agreements P 9,773,000,000.00
B. Special Savings Accounts 2,275,011,526.88
----------------------
Total 12,048,011,526.88
Rate of Tax 0.15%
----------------------
Total
Tax due thereon P 18,072,017.29
Add:
25% Surcharge 4,518,004.32
Compromise Penalty 25,000.00 4,543,004.32
---------------- ---------------------
Total Deficiency DST-Industry Issue
P 22,615,021.61[8]
On
x x x x
B. On the Special Savings Account:
With respect to the Savings Plus Deposit transactions, the latter is also not subject to documentary stamp tax because by the very nature of the transaction which is just a variation of the regular savings account, the same is not taxable under the aforequoted Section 180. Let us consider some salient features of the product that differentiates it from a Time Deposit Account:
1. The terms and conditions of the Savings Plus Deposit are provided for in the traditional passbook form as distinguished from a Time Deposit Account which is evidenced by a certificate of deposit.
2. In a time deposit, there is no partial withdrawal. The term is preterminated and the certificate of deposit is cancelled and surrendered and the entire amount is paid to the depositor. In the case of Savings Plus Deposit, however, there is partial withdrawal, which is posted in the passbook. The amount withdrawn is paid to the depositor and the passbook is returned to the depositor. In other words, the Savings Plus Deposit, contrary to the basis for assessment, represents a continuing fund which is open to deposits and withdrawals anytime, and therefore, falls under the category of certificates of deposit at sight or on demand which is exempt from documentary stamp tax.
3. When fifty percent (50%) of the term of a Time Deposit had lapsed, interest to be paid is fifty percent (50%) of the agreed rate. When less than fifty percent (50%) of the term had lapsed, interest to be paid is twenty- five percent (25%) of the agreed rate. In the case of a Savings Plus Deposit, however, amount withdrawn earns only the regular fixed savings rate of three percent (3%).
4. The features of the product in no way resemble that of a promissory note or a certificate of indebtedness, and
5. The intention, not any occasional error in the implementation of the product, should be the basis of taxation. A correctible error in the implementation does not convert a non-taxable product into a taxable one.
In view of all the foregoing reasons and considerations, we hereby request that subject assessment notice be recalled and/or reconsidered, the same not being due and demandable from China Bank, under the premises.[10]
On
On P13,781,350.00,
representing deficiency documentary stamp tax on petitioner’s RRAs and SSDs for
the taxable years 1996 and 1997.
On
On
On
IN VIEW WHEREOF, this Office do hereby resolved the following:
1. The protest of herein protestant bank on the deficiency stamp taxes on RRPs covering the years 1994, 1995 and 1996 under the following Assessment Notices, to wit:
Assessment Notice No. Amount Year
ST-DST-94-0054-99 P
820,000.00 1994
ST-DST-95-0055-99 P18,349,375.00 1995
ST-DST-96-0374-99 P 1,976,250.00 1996
are hereby withdrawn and cancelled and the same are considered closed and terminated.
2.
The protest of herein protestant bank on the deficiency
stamp tax on RRPs for 1997 under Assessment Notice No. ST-DST-97-0372-99
demanding payment of P3,523,600.00 is hereby affirmed and reiterated.
3. The protest of herein protestant bank on the deficiency stamp taxes on SSA covering the taxable years 1994, 1995, 1996 and 1997 under the following Assessment Notices, to wit:
Assessment Notice No. Amount Year
ST-DST-94-0054-99 P4,
041,822.48 1994
ST-DST-95-0055-99 4,290,646.61 1995
ST-DST-96-0371-99 1,633,750.00 1996
ST-DST-97-0373-99 2,595,400.00 1997
are hereby affirmed in all respects.
Consequently, the protestant bank is hereby ordered to pay the above- stated amounts plus interest that may have accrued thereon until actual payment to the Collection Service, BIR National Office, Diliman, Quezon City, within thirty (30) days from receipt hereof, otherwise, the collection thereof shall be effected through the summary remedies provided by law.
This constitutes the final decision of this Office on the matter.[18]
On
On
IN VIEW OF THE FOREGOING, the subject Petition for Review is
hereby PARTIALLY GRANTED. Assessment Notice No. ST-DST-97-0372-99 for
deficiency documentary stamp taxes on petitioner’s Reverse Repurchase Agreement
Transactions in the amount of P3,523,600.00 covering the taxable year
1997 is hereby CANCELLED AND WITHDRAWN. However, Assessment Notice Nos.
ST-DST-94-0054-99, ST-DST-95-0055-99, ST-DST-96-0371-99, and ST-DST-96-0373-99
for deficiency documentary stamp taxes on petitioner’s Special Savings Deposit
Accounts for the taxable years 1994, 1995, 1996 and 1997, respectively, are
UPHELD but in the following modified amounts:
x x x x
Accordingly, petitioner is ORDERED TO PAY the above
recomputed documentary stamp tax liabilities of P4,016,822.48, P4,265,646.61,
P1,218,750.00 and P1,890,000.00 or in the total amount of P11,391,219.09,
plus 20% delinquency interest from February 24, 2002 until full payment thereof
pursuant to Section 249 (c) of the 1997 Tax Code.
SO ORDERED.[21]
On
On
Aggrieved with the Decision and Resolution of the CTA, petitioner then filed
a petition for review[24]
before the CTA en banc.
On
WHEREFORE, the instant petition is hereby DENIED DUE COURSE, and accordingly, DISMISSED for the above-stated reasons. The assailed Decision and Resolution are hereby AFFIRMED.[26]
The CTA en banc ruled that a deposit account which
have the same features as a time deposit account, i.e., a fixed term in
order to earn a higher interest rate, is subject to the Documentary Stamp Tax
imposed in Section 180[27]
of the 1997 National Internal Revenue Code.[28]
Specifically, the CTA en banc held that the SSDs are “certificates of
deposit drawing interest” as contemplated under Section 180.
Petitioner then filed a Motion for Partial
Reconsideration,[29] which
was, however, denied by the CTA en banc in a Resolution[30]
dated
Hence, herein petition, with petitioner raising the
following errors, to wit:
I
IN RENDERING THE QUESTIONED DECISION AND RESOLUTION (ANNEXES “A” AND
“B”), THE HONORABLE COURT OF TAX APPEALS EN BANC, IN CLEAR DISREGARD OF THE
BASIC RULES ON STATUTORY CONSTRUCTION, ERRONEOUSLY AND CAPRICIOUSLY INTERPRETED
THE BANKING-INDUSTRYWIDE INNOVATIVE PRODUCT CALLED “SPECIAL SAVINGS DEPOSIT” AS
A CERTIFICATE OF TIME DEPOSIT SUBJECT TO DOCUMENTARY STAMP TAX UNDER SECTION
180 OF THE THEN GOVERNING NATIONAL INTERNAL REVENUE CODE.
II
THE
HONORABLE COURT OF TAX APPEALS EN BANC GRAVELY ERRED IN NOT CONSIDERING THAT
ITS ERRONEOUS INTERPRETATION OF THE “SPECIAL SAVINGS DEPOSIT” WAS ONLY RATIONALIZED
AND EXPLICITLY PROVIDED FOR UNDER REPUBLIC ACT NO. 9243, OTHERWISE KNOWN AS “AN
ACT RATIONALIZING THE PROVISIONS ON THE DOCUMENTARY STAMP TAX OF THE NATIONAL
INTERNAL REVENUE CODE OF 1997, AS AMENDED, AND FOR OTHER PURPOSE” WHICH WAS
ENACTED INTO LAW ON FEBRUARY 7, 2004.[31]
The petition is not meritorious.
The issue of whether or not Special
Savings Deposits are subject to documentary stamp tax
is not novel as the same has been the
subject of this Court’s ruling in International Exchange Bank v.
Commissioner of Internal Revenue[32]
(International) and Philippine Banking Corporation v. Commissioner of
Internal Revenue[33](PBC).
Section 180 of the 1997 National
Internal Revenue Code, as amended, provides:
Sec.
180. Stamp tax on all loan agreements,
promissory notes, bills of exchange, drafts, instruments and securities issued
by the government or any of its instrumentalities, certificates of deposit
bearing interest and others not payable on sight or demand. — On all
loan agreements signed abroad wherein the object of the contract is located or
used in the Philippines; bills of exchange (between points within the
Philippines), drafts, instruments and securities issued by the Government or
any of its instrumentalities or certificates of deposits drawing interest,
or orders for the payment of any sum of money otherwise than at the sight or on
demand, or on all promissory notes, whether negotiable or non-negotiable,
except bank notes issued for circulation, and on each renewal of any such note,
there shall be collected a documentary stamp tax of Thirty centavos (P0.30)
on each Two hundred pesos, or fractional part thereof, of the face value of any
such agreement, bill of exchange, draft, certificate of deposit, or note:
provided, that only one documentary stamp tax shall be imposed on either loan
agreement, or promissory note issued to secure such loan, whichever will yield
a higher tax: provided, however, that loan agreements or promissory notes the
aggregate of which does not exceed Two hundred fifty thousand pesos (P250,000)
executed by an individual for his purchase on installment for his personal use
or that of his family and not for business, resale, barter or hire of a house,
lot, motor vehicle, appliance or furniture shall be exempt from the payment of
the documentary stamp tax provided under this section.
The CTA en banc dissected
Section 180 and enumerated the following documents which are subject to
documentary stamp tax, to wit:
1. Loan Agreements;
2. Bills of Exchange;
3. Drafts;
4. Instruments and Securities issued by the Government or any of its instrumentalities;
5.
Certificates of Deposit Drawing Interest;
6. Order for the payment of money otherwise that at sight or on demand;
7. Promissory Notes, whether negotiable or non-negotiable.[34]
From said enumeration, the CTA en banc held that petitioner’s SSDs
fall under the category of “certificates of deposit drawing interest.”
In Far East Bank and Trust Company v. Querimit,[35]
the Court defined a certificate of deposit as “a written acknowledgment by a
bank or banker of the receipt of a sum of money on deposit which the bank or
banker promises to pay to the depositor, to the order of the depositor, or to
some other person or his order, whereby the relation of debtor and creditor
between the bank and the depositor is created.” A certificate of deposit is
also defined as “a receipt issued by a bank for an interest-bearing time
deposit coming due at a specified future date.”
In its Decision, the CTA en banc held that
certificates of time deposit are subject to documentary stamp tax and that the
same are but a type of a certificate of deposit drawing interest.[36]
Hence, whether or not SSDs are subject to documentary stamp tax is dependent on
the nature and specific features thereof. It is thus conceded that if the SSDs
are more akin to a time deposit account then the same would be subject to
documentary stamp tax. However, if the SSDs are more akin to a regular savings
deposit account then the same would not be subject to documentary stamp tax.
Petitioner argues that its SSDs have the same distinctive features of a
regular savings deposit account. Particularly, petitioner asserts that its SSDs
are not “certificates of deposits drawing interest” as held by the CTA en banc.
Petitioner thus explains:
Firstly, the law, as it may in pertinence, be scrutinized, specifically mentioned “certificates of deposits drawing interest” as subject to the documentary stamp tax. In the special savings deposit of petitioner, what is issued to a depositor is a passbook just like in regular savings deposit. The reason for this is that, as appreciated by the Honorable Court a quo itself --- the amount deposited in the special savings deposit is withdrawable any time. Partial or full withdrawal may be done by the depositor from this deposit. Not only this, the depositor may likewise deposit any amount he pleases anytime he wants. Hence, the fund in a special savings deposit is a continuing fund, just like regular savings account. The passbook then would be suitable and proper record of all the transactions made and to be made on the special savings deposit.
Certificates of deposit, on the other hand, are issued to evidence a time deposit placement. Time deposits, to a tee, are certificates of indebtedness issued by a bank for fixed amounts which earn interest at fixed rates and payable at a fixed future date. These features do not attend foursquare on the special savings deposit. In the latter, just like in ordinary savings deposit, there is a minimum amount of deposit required, but it is never fixed or stipulated upon; the interest is assured at savings deposit rate but if the balance required is maintained for a certain period, the depositor is entitled to a prevailing market rate; and, special savings deposit has no maturity date and is a continuing concern. With the withdrawability of the amount deposited herein at any time, as the depositor may please, special savings deposit just like an ordinary savings account includes itself under the category of deposit payable at sight or on demand, read as “orders for the payment of any sum of money [otherwise] at sight or on demand” which is exempt from documentary stamp tax.[37]
This Court does not agree. Contrary to the claim of petitioner, the SSDs
are in fact “certificates of deposits drawing interest” subject to documentary
stamp tax as provided for in Section 180 of the 1997 NIRC.
In PBC, this Court
distinguished a regular savings account, a time deposit account and the
Special/Super Savings Deposit Account (SSDA) in the following manner, to wit:
|
|
Savings Account |
Time Deposit |
SSDA |
|
Interest rate |
Regular savings interest |
Higher interest rate |
Higher interest rate |
|
Period |
None |
Fixed Term |
Fixed Term |
|
Evidenced by: |
Passbook |
Certificate of Time Deposit |
Passbook |
|
Pre-termination |
None |
With penalty |
With penalty |
|
Holding Period |
None |
Yes |
Yes |
|
Withdrawal |
Allowed |
Withdrawal amounts to pre- termination |
Allowed provided the minimum amount to earn the higher interest rate is maintained, otherwise, the regular savings interest rate will apply. |
Based on the foregoing comparison, the
Court in PBC ruled that a “Special/Super Savings Deposit Account” has
all the distinct features of a certificate of deposit, to wit:
Based
on the definition and comparison, it is clear that a certificate of deposit
drawing interest as used in Section 180 of the 1977 NIRC refers to a time
deposit account. As the Bureau of Internal Revenue (BIR) explained in Revenue
Memorandum Circular No. 16-2003, the distinct features of a certificate of
deposit from a technical point of view are as follows:
a. Minimum deposit requirement;
b. Stated maturity period;
c. Interest rate is higher than the ordinary savings
account;
d. Not payable on sight or
demand, but upon maturity or in case of pre-termination, prior notice is
required; and
e. Early withdrawal penalty
in the form of partial loss or total loss of interest in case of
pre-termination.
The
SSDA is for depositors who maintain savings deposits with substantial average
daily balance and which earn higher interest rates. The holding period of an
SSDA floats at the option of the depositor at 30, 60, 90, 120 days or more and
for maintaining a longer holding period, the depositor earns higher interest
rates. There is no pre-termination of accounts in an SSDA because the account
is simply reverted to an ordinary savings status in case of early or partial
withdrawal or if the required holding period is not met. Based on the foregoing, the SSDA has all of
the distinct features of a certificate of deposit.
In International, this Court
held that a “Savings Account-Fixed Savings Deposit” is likewise subject to
documentary stamp tax, to wit:
The FSD, like a time deposit, provides for a higher interest rate when the deposit is not withdrawn within the required fixed period; otherwise, it earns interest pertaining to a regular savings deposit. Having a fixed term and the reduction of interest rates in case of pre-termination are essential features of a time deposit. Thus, explains the CTA En Banc:
It is well-settled that certificates
of time deposit are subject to the DST and that a certificate of time deposit
is but a type of a certificate of deposit drawing interest. Thus, in resolving the issue before Us, it is
necessary to determine whether petitioner’s Savings Account-Fixed Savings
Deposit (SA-FSD) has the same nature and characteristics as a time
deposit. In this regard, the findings of
fact stated in the assailed Decision [of the CTA Division] are as follows:
“In this case, a
depositor of a savings deposit-FSD is required to keep the money with the
bank for at least thirty (30) days in order to yield a higher interest rate. Otherwise, the deposit earns interest
pertaining only to a regular savings deposit.
“The same feature is present in a time
deposit. A depositor is allowed to
withdraw his time deposit even before its maturity subject to bank charges on
its pre[-]termination and the depositor loses his entitlement to earn the
interest rate corresponding to the time deposit. Instead, he earns interest pertaining only to
a regular savings deposit. Thus,
petitioner’s argument that the savings deposit-FSD is withdrawable anytime as
opposed to a time deposit which has a maturity date, is not tenable. In both cases, the deposit may be withdrawn
anytime but the depositor gets to earn a lower rate of interest. The
only difference lies on the evidence of deposit, a savings deposit-FSD is
evidenced by a passbook, while a time deposit is evidenced by a certificate of
time deposit.”
In order for a depositor to earn
the agreed higher interest rate in a SA-FSD, the amount of deposit must be
maintained for a fixed period. Such
being the case, We agree with the finding
that the SA-FSD is a deposit account with a fixed term. Withdrawal before the expiration of said
fixed term results in the reduction of the interest rate. Having a fixed term and reduction of interest
rate in case of pre-termination are essentially
the features of a time deposit.
Hence, this Court concurs with the conclusion reached in the assailed
Decision that petitioner’s SA-FSD and time deposit are substantially the same.
. . . (Italics in the original; underscoring supplied)
The findings and conclusions reached by the CTA which, by the very nature of its function, is dedicated exclusively to the consideration of tax problems and has necessarily developed an expertise on the subject, and unless there has been an abuse or improvident exercise of authority, and none has been shown in the present case, deserves respect.[38]
In herein petition, petitioner’s version of the special savings deposit
is called the “Savings Plus Deposit Accounts.” Said accounts have the following
features as can be gathered from the petition:
1. Amount deposited is withdrawable anytime[39]
2. The same is evidenced by a passbook[40]
3. The rate of interest offered is the prevailing market rate, provided the depositor would maintain his minimum balance in thirty (30) days at the minimum, and should he withdraw before the period, his deposit would earn the regular savings deposit rate.[41]
Based on the foregoing, the conclusion is certain in that petitioner’s
SSDs are “certificates of deposits drawing interest” as contemplated in Section
180 of the 1997 National Internal Revenue Code. Petitioner’s “Savings Plus Deposit”
is essentially the same as the “Savings Account-Fixed Savings Deposit” in International,
as well as the “Special/Super Savings
Account” in PBC wherein this
Court ruled that said accounts are subject to documentary stamp tax.
Petitioner, however, insists that its SSDs are evidenced by a passbook and
thus it claims that the same should bolster its position that said accounts are
more akin to a regular savings deposit account.
This Court does not agree. In International, this Court held that a passbook representing an interest-earning deposit
account issued by a bank qualifies as a certificate of
deposit drawing interest.[42]A
document to be deemed a certificate of deposit requires no specific form as
long as there is some written memorandum that the bank accepted
a deposit of a sum of money from a depositor. What is important and
controlling is the nature or meaning conveyed by the passbook and not the
particular label or nomenclature attached to it, inasmuch as substance, not
form, is paramount.[43]
Anent the second error raised, the same deserves
scant consideration. Petitioner cites Republic Act (R.A.) No. 9243[44]
(approved on February 17, 2004), whereby Section 180 of the 1997 NIRC was
amended, to wit:
SEC. 5. Section 180 of the
National Internal Revenue Code of 1997, as amended, is hereby
renumbered as Section 179 and further amended to read as follows:
SEC. 179. Stamp Tax
on All Debt Instruments. – On every original issue of debt instruments, there
shall be collected a documentary stamp tax of One peso (P1.00) on each
Two hundred pesos (P200), or fractional part thereof, of the issue price
of any such debt instruments: Provided,
That for such debt instruments with terms of less than one (1) year, the
documentary stamp tax to be collected shall be of a proportional amount in
accordance with the ratio of its term in number of days to three hundred
sixty-five (365) days: Provided, further,
That only one documentary stamp tax shall be imposed on either loan agreement,
or promissory notes issued to secure such loan.
For purposes of this section, the term debt instrument shall mean instruments representing borrowing and lending transactions including but not limited to debentures, certificates of indebtedness, due bills, bonds, loan agreements, including those signed abroad wherein the object of contract is located or used in the Philippines, instruments and securities issued by the government of any of its instrumentalities, deposit substitute debt instruments, certificates or other evidences of deposits that are either drawing interest significantly higher than the regular savings deposit taking into consideration the size of the deposit and the risks involved or drawing interest and having a specific maturity date, orders for payment of any sum of money otherwise than at sight or on demand, promissory notes, whether negotiable or non-negotiable, except bank notes issued for circulation.” (Underscoring supplied)
Petitioner asserts that the amendment
of Section 180 of the National Internal Revenue Code of 1997 only shows
ostensibly that the old Section 180 was not applicable to special savings
deposit, which by then cannot be slapped with the imposition of documentary
stamp tax.[45] Simply
put, at the time material to this case, when R.A. No. 9243 was yet to be
enacted, petitioner contends there was no law that clearly subjected its special
savings deposits to documentary stamp tax.[46]
This Court does not agree. In International,
the Court held that the further amendment was intended
to eliminate the scheme used by banks of issuing passbooks to “cloak” its time
deposits as regular savings deposits.[47]
More importantly, the Court held that the amendment to include “other
evidences of deposits that are drawing interest significantly higher than the
regular savings deposit” was merely intended to eliminate the ambiguity[48]
as reflected in the exchanges[49]
between Mr. Miguel Andaya of the Bankers Association of the Philippines and
Senator Ralph Recto, Senate Chairman of the Committee on Ways and Means, during
the deliberations on Senate Bill No. 2518 which eventually became R.A. No. 9243.
Contrary therefore to petitioner’s position, International is categorical in that the
said amendment did not signify that time deposits evidenced by a passbook were
exempt from documentary stamp tax under Section 180 of the 1997 NIRC,[50]
but that it merely served to eliminate the ambiguity in the law.
WHEREFORE, the petition is DENIED. The January 3, 2006 Decision
and
SO ORDERED.
DIOSDADO
M. PERALTA
Associate
Justice
WE CONCUR:
CONSUELO YNARES-SANTIAGO
Associate Justice
Chairperson
MINITA
V. CHICO-NAZARIO PRESBITERO
J. VELASCO, JR.
Associate Justice
Associate
Justice
TERESITA J. LEONARDO-DE CASTRO
Associate Justice
ATTESTATION
I attest that the conclusions in the above Decision
had been reached in consultation before the case was assigned to the writer of
the opinion of the Court’s Division.
CONSUELO
YNARES-SANTIAGO
Associate
Justice
Third
Division, Chairperson
CERTIFICATION
Pursuant to Section 13, Article VIII of the
Constitution and the Division Chairperson’s Attestation, I certify that the
conclusions in the above Decision were reached in consultation before the case
was assigned to the writer of the opinion of the Court’s Division.
REYNATO
S. PUNO
Chief Justice
* Designated as an additional member in lieu of Associate Justice Antonio Eduardo B. Nachura per Raffle dated September 28, 2009.
[1] Rollo, pp. 36-62.
[2] Penned by Associate Justice Juanito C. Castaneda, Jr., with Presiding Justice Ernesto D. Acosta and Associate Justices Lovell R. Bautista, Erlinda P. Uy and Olga Palanca-Enriquez, concurring; Caesar A. Casanova, concurring and dissenting; id. at 7-23.
[3] Rollo, pp. 86-87.
[4] Id. at 40.
[5] Id. at 134; with Annexes, id. at 135-140.
[6] Id. at 141.
[7] Id. at 143.
[8] Id. at 145.
[9] Id. at 147-150.
[10] Id. at 149-150.
[11] Id. at 151-152.
[12] Id. at 153.
[13] Id. at 154-155.
[14] Id. at 160-163.
[15] Id. at 164.
[16] Id. at 165-171.
[17] Id. at 172-183.
[18] Id. at 182-183.
[19] Id. at 184-193.
[20] Id. at 204-222.
[21] Id. at 220-221.
[22] Id. at 223-230.
[23] Id. at 238-241.
[24] Id. at 242-256.
[25] Id. at 65-81.
[26] Id. at 80.
[27] Sec.
180. Stamp tax on all loan agreements,
promissory notes, bills of exchange, drafts, instruments and securities issued
by the government or any of its instrumentalities, certificates of deposit
bearing interest and others not payable on sight or demand. — On all loan agreements signed abroad
wherein the object of the contract is located or used in the Philippines; bills
of exchange (between points within the Philippines), drafts, instruments and
securities issued by the Government or any of its instrumentalities or certificates
of deposits drawing interest, or orders for the payment of any sum of money
otherwise than at the sight or on demand, or on all promissory notes, whether
negotiable or non-negotiable, except bank notes issued for circulation, and on
each renewal of any such note, there shall be collected a documentary stamp tax
of Thirty centavos (P0.30) on each Two hundred pesos, or fractional part
thereof, of the face value of any such agreement, bill of exchange, draft, certificate
of deposit, or note: Provided, that
only one documentary stamp tax shall be imposed on either loan agreement, or
promissory note issued to secure such loan, whichever will yield a higher tax: Provided, however, that loan agreements
or promissory notes the aggregate of which does not exceed Two hundred fifty
thousand pesos (P250,000) executed by an individual for his purchase on
installment for his personal use or that of his family and not for business,
resale, barter or hire of a house, lot, motor vehicle, appliance or furniture
shall be exempt from the payment of the documentary stamp tax provided under
this Section.
[28] Rollo, p. 75.
[29] Id. at 92-101.
[30] Id. at 86-87.
[31] Id. at 45-46.
[32] G.R. No. 171266,
[33] G.R. No. 170574,
[34] Rollo, p. 76.
[35] 424 Phil 721, 730 (2002).
[36] Rollo, p. 77.
[37] Id. at 51-52.
[38] Supra note 32, at 698-700.
[39] Rollo, p. 48.
[40] Id.
[41] Id. at 49.
[42] Supra note 32, at 697.
[43] Id.
[44] AN ACT RATIONALIZING THE PROVISIONS OF THE DOCUMENTARY STAMP TAX OF THE NATIONAL INTERNAL REVENUE CODE OF 1997, AS AMENDED, AND FOR OTHER PURPOSES.
[45] Rollo, p. 56.
[46] Id.
[47] Supra note 32, at 701.
[48] Id.
[49] MR. MIGUEL ANDAYA (Bankers Association of the
THE CHAIRMAN. That’s right.
MR. ANDAYA. Time deposit is subject. I agree with you in principle that if we are
going to encourage deposits, whether savings or time…
THE CHAIRMAN. Uh-huh.
MR. ANDAYA. . .it’s questionable whether
we should tax it with DST at all, even the question of imposing final
withholding tax has been raised as an issue.
THE CHAIRMAN. If I had it my way, I’ll cut it by half.
MR. ANDAYA. Yeah, but I guess concerning
the constraint of government revenue, even the industry
itself right now is not pushing in that direction, but in the long term, when
most of us in this room are gone, we hope that DST will disappear from the face
of this earth, ‘no.
Now,
I think the move of the DOF to expand the coverage of or to add that phrase,
“Other evidence of indebtedness,” it just removed ambiguity. When we testified earlier in the House on
this very same bull, we did not interpose any objections if only for the sake
of avoiding further ambiguity in the implementation of DST on deposits. Because of what has happened so far is, we
don’t know whether the examiner is gonna come in and say, “This savings deposit
is not savings but it’s time deposit.”
So, I think what DOF has done is to eliminate any confusion. They said that a deposit that has a maturity.
. .
THE CHAIRMAN. Uh-huh.
MR. ANDAYA. . . . which is time, in
effect, regardless of what form it takes should be subject to DST.
THE CHAIRMAN. Would that include savings deposit now?
MR. ANDAYA. So that if we cloaked a deposit as savings
deposit but it has got a fixed maturity . . .
THE CHAIRMAN. Uh-huh.
MR. ANDAYA. . . that
would fall under the purview. (Underscoring
supplied; Transcript of Stenographic Notes, Deliberations of the Senate
Committee on Ways and Means, August 14,
2002. pp. 2-3.)
[50] International Exchange Bank v. CIR, supra note 32, at 701.