Bureau of Internal Revenue Implements Enhanced Electronic Documentary Stamp Tax System
The Bureau of Internal Revenue (BIR) has taken a significant step toward modernizing tax administration with the issuance of Revenue Regulation (RR) 28-2025. Published on the BIR's official website and taking effect on January 6, 2026, this regulation implements the enhanced version of the Electronic Documentary Stamp Tax (eDST) System. The regulation was originally issued on December 22, 2025, and represents a crucial update to the Philippines' tax compliance framework.
Mandatory Coverage for Specific Taxpayer Industries
The enhanced eDST system is now mandatory for taxpayers, whether individuals or non-individuals, operating in designated sectors. This requirement aims to streamline tax collection and enhance transparency. The covered industries include:
- Banks, quasi-banks, non-bank financial intermediaries, finance companies, and insurance, surety, fidelity, or annuity companies.
- Shipping and airline companies, which handle numerous taxable documents.
- Pre-need companies specifically in relation to the sale of pre-need plans.
- Educational institutions that issue taxable certificates such as diplomas and transcripts of records.
- National government agencies and instrumentalities, including government-owned or controlled corporations and local government units (except barangays), for documents taxable as certificates.
- Notaries public, including those employed in law firms and other public or private offices.
- Other industries that may later be required by the Secretary of Finance upon recommendation of the Commissioner of Internal Revenue.
This broad coverage ensures that key economic players adopt digital tax processes, reducing manual errors and improving efficiency.
How the Enhanced eDST System Operates
Under the enhanced eDST system, taxpayers have flexibility in how they manage their documentary stamp tax obligations. Upon enrollment, they must choose between two distinct modules:
- Deposit Module: This option requires an advance deposit, which is credited to the taxpayer's ledger account. The deposit is automatically deducted each time documentary stamps are printed for taxable documents, providing a prepaid approach to tax payments.
- Non-Deposit Module: This alternative allows for the immediate printing of documentary stamps without an advance deposit. However, the total documentary stamp tax for all documents printed during the month must be remitted on or before the prescribed deadline, offering a pay-as-you-go model.
It is important to note that once a taxpayer has enrolled and selected a module, shifting to the other module is no longer allowed. This decision requires careful consideration based on the taxpayer's cash flow and operational needs.
Limited Use of Loose Documentary Stamps
As an exception to the mandatory use of the enhanced eDST system, the BIR permits the use of loose documentary stamps, but with strict limitations. These limitations may be further detailed through separate issuances. Key restrictions include:
- Loose documentary stamps may only be used for documents taxable under Section 188 of the Tax Code where the documentary stamp tax due does not exceed P30.
- The affixture of multiple loose stamps to cover a tax due exceeding P30 is prohibited, preventing circumvention of the digital system.
- The advance purchase of multiple loose documentary stamps for future affixture is generally not allowed, except as may be permitted by the Commissioner, ensuring controlled usage.
These measures are designed to phase out manual processes while accommodating small-scale transactions.
Treatment of Excess Deposit Upon Business Closure
In the event of business closure, the regulation provides clear guidelines for handling any excess deposit in the taxpayer's eDST ledger account. The process involves:
- The BIR will validate the excess deposit to ensure accuracy.
- The validated excess will first be applied against outstanding documentary stamp tax liabilities.
- Any remaining amount will then be applied against other tax liabilities of the taxpayer.
- After settlement of all tax dues, any remaining balance will be refunded to the taxpayer, ensuring fair treatment.
This structured approach protects taxpayer funds and maintains compliance even during business transitions.
The implementation of RR 28-2025 marks a pivotal move toward digitalization in the Philippines' tax system, aligning with global trends and enhancing revenue collection efficiency. Taxpayers in the specified industries are advised to familiarize themselves with the new requirements to ensure seamless compliance.
