Department of Finance rejects use of costly paper for invoices, receipts

MANILA, Philippines – The Department of Finance (DOF) has rejected a proposal requiring all government agencies, state-owned corporations, local government units and private corporations to use water-marked security paper in all receipts and invoices and other official documents.

The proposal, introduced by Rep. Simeon Datumanong (2nd District, Maguindanao) at the House of Representatives, aims to enhance tax monitoring and collection and to avoid tax fraud and corruption.

“It is also expected that the use of water-marked paper in all commercial and business transactions could minimize, if not completely eliminate the use of falsified receipts and other documents,” Datumanong said in the proposal.

However, the Finance department said that while the objectives of the proposal are commendable, the implementation of such a scheme would mean increased cost to business establishments as well as to the government.

The department also said that the move may not be practical because receipts, invoices and licenses printed by the National Printing Office are already water marked.

The NPO has the exclusive jurisdiction over the printing, binding and distribution of all standard and accountable forms of national, provincial, city and municipal governments including GOCCs.

“According to the NPO, the sales price of receipts with water-mark has increased, in comparison with the ordinary paper by about 43 percent or from about P70 per booklet to about P100 per booklet. The price is even more expensive depending on the quality, size, color, whether one or multi-colored and the preferred design to be water-marked,” the Finance department said in a position paper.

In terms of addressing the problem of falsified receipts, the department said this has already been partly addressed with the adoption of the value-added tax (VAT) system that strongly motivates taxpayers to demand receipts.

The VAT system motivates taxpayers to demand receipts because they need to support their claims for tax credits on input taxes for VAT.

“This is seen as a deterrent measure for establishments to issue bogus receipts as they can be easily identified through the claims for input VAT,” the Finance department said.

Given these factors, the department said there should be an in depth cost and benefit analysis on the use of water-marked paper in all official documents.