DOF, BIR publish order to reiterate documentary stamp tax exemption of COVID-19 loan relief
The Department of Finance (DOF) and the Bureau of Internal Revenue (BIR) have reiterated the exemption from documentary stamp tax (DST) of the loan relief provided during the enhanced community quarantine period aimed at containing the spread of COVID-19.
Revenue Regulation (RR) No. 8-2020 issued by Finance Secretary Carlos G. Dominguez III and Internal Revenue Commissioner Caesar R. Dulay was published on Friday (April 3) to serve as an implementing guideline for the Bayanihan to Heal as One Act enacted to give President Rodrigo Duterte additional powers to deal with the pandemic.
The loan payment moratorium mandated by the Bayanihan law waived the DST, which was usually being slapped on loan agreements.
Dulay supported RR 8-2020 with Revenue Memorandum Circular 35-2020 ordering all banks and other financing institutions to heed the DST exemption rule.
Specifically exempted from DST payments were credit extensions and restructuring, as well as micro-lending like those provided by pawnshops.
In 2018, the Tax Reform for Acceleration and Inclusion (TRAIN) Act doubled most DST rates, except for those slapped on debt instruments which rose by only half.
The TRAIN law nonetheless kept the prevailing DST rates on other transactions.
As of end-September 2019, actual DST collections exceeded target by P4.7 billion due to “higher transaction value and better collection efficiency,” according to Finance Undersecretary Karl Kendrick T. Chua.
Edited by TSB
For more news about the novel coronavirus click here.
What you need to know about Coronavirus.
For more information on COVID-19, call the DOH Hotline: (02) 86517800 local 1149/1150.
The Inquirer Foundation supports our healthcare frontliners and is still accepting cash donations to be deposited at Banco de Oro (BDO) current account #007960018860 or donate through PayMaya using this link.
