Loose Documentary Stamps Are No Longer the Default

For many years, documentary stamps were treated as a routine administrative requirement—purchased, affixed, and largely overlooked.

With the issuance of Revenue Regulations No. 028-2025, the Bureau of Internal Revenue (BIR) is clearly signaling a shift. The use of electronic Documentary Stamp Tax (eDST) is no longer merely encouraged; for certain industries, it is becoming the expected standard.

This development marks a significant change in how Documentary Stamp Tax is administered, monitored, and enforced.

A Clear Direction from the BIR

The eDST system itself has existed for some time. What distinguishes this regulation is the degree to which its use is now being enforced.

Under RR No. 028-2025, covered taxpayers are required to pay, generate, and affix Documentary Stamp Tax electronically through the BIR’s enhanced eDST platform. The objective is to standardize DST compliance, improve traceability, and reduce reliance on manual processes.

This is not a cosmetic update. It reflects a broader policy direction toward tighter regulatory oversight.

Who Should Pay Close Attention

While larger institutions—such as banks, insurance companies, and financial intermediaries—have long anticipated this transition, the regulation has broader implications.

Notaries public, educational institutions, professional firms, and other organizations that regularly issue documents subject to DST may now find themselves directly affected.

If an organization issues instruments covered under Section 188 of the National Internal Revenue Code, this regulation warrants immediate review. Once classified as a covered taxpayer, previous practices involving loose documentary stamps may no longer be permissible.

Mandatory Enrollment in the Enhanced eDST System

Enrollment in the enhanced eDST system is mandatory for covered taxpayers and must be completed through the BIR’s online platform.

Taxpayers must select one of two available modules:

• Deposit Module – Requires an advance deposit credited to an eDST ledger, from which DST is automatically deducted upon issuance of documents.

• Non-Deposit Module – Allows immediate generation of documentary stamps, with total DST remitted on a monthly basis.

The choice of module has operational and cash flow implications. Importantly, once enrollment is completed, the selected module cannot be changed.

The Limited Role of Loose Documentary Stamps

As a general rule, taxpayers mandated to use the eDST system may no longer rely on loose documentary stamps or constructive affixture.

Limited exceptions exist, but they are narrowly defined. Loose stamps may only be used for documents with a DST of ₱30.00, and only when such documents are not otherwise required to be processed through eDST. The use of multiple stamps to cover higher DST amounts is expressly prohibited, as is the advance purchase of stamps for future use.

The practical implication is clear: loose documentary stamps are no longer a default solution.

Compliance Risks and Enforcement

Most compliance issues arise not from deliberate noncompliance, but from outdated practices.

Under RR No. 028-2025, documents that are improperly stamped may expose taxpayers to penalties, surcharges, and potential legal consequences. The regulation also reinforces existing prohibitions, including the reuse of documentary stamps and the sale of stamps at prices exceeding their face value.

These provisions underscore the importance of updating internal controls and procedures.

Treatment of Excess eDST Deposits

For taxpayers enrolled under the Deposit Module, any excess balance in the eDST ledger will be subject to validation by the BIR.

Such balances may be applied against outstanding DST or other tax liabilities, with any remaining amount eligible for refund. This process becomes particularly relevant during audits or in cases involving business closure.

Effectivity and Timing Considerations

RR No. 028-2025 takes effect 15 days after publication in the Official Gazette or on the BIR’s official website, whichever comes first.

While the transition period may appear brief, practical implementation—including system enrollment and internal process adjustments—often requires careful planning. Early preparation is therefore advisable.

Moving Forward

This regulation is not intended to disrupt business operations, but to enhance consistency and accountability in DST compliance.

Organizations that issue DST-taxable documents should take this opportunity to:

• Review the nature of their document issuances

• Confirm whether they fall within the regulation’s scope

• Determine the most appropriate eDST module

• Align internal workflows with current BIR requirements

Proactive compliance remains the most effective way to mitigate regulatory risk.

Closing Perspective

Revenue Regulations No. 028-2025 represents more than a procedural update. It reflects the BIR’s continued effort to modernize tax administration and reduce reliance on manual processes.

For affected taxpayers, the critical consideration is not merely compliance at issuance, but whether their documents will withstand scrutiny in future reviews. Addressing these changes now provides greater certainty later.