Plugging the leaks: Curbing fraud and boosting government revenue with the enhanced eDST System

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February 3, 2026 | 12:00am

The issuance of Revenue Regulation 28-2025 by the Bureau of Internal Revenue (BIR) on Dec. 22, 2025, represents a significant leap toward the modernization of a long-outstanding tax requirement that had historically been paper-based, time-consuming and prone to inefficiencies.

This regulation implements the enhanced version of the Electronic Documentary Stamp Tax (eDST) System, which not only provides convenience to users but also serves as a strong measure against tax evasion and a blueprint for maximizing government revenue collection. The transition of traditional tax compliance to digitalization will help tax authorities curb tax evasion by increasing transparency, traceability and real-time oversight across economic transactions. It also aligns with the Ease of Paying Taxes Act that aims to modernize tax administration, enhance taxpayer experience and encourage compliance.

This regulation expands the list of industries mandated to use the enhanced version of the eDST System and thereby captures a larger share of DST revenue in a format or medium that is 100 percent auditable. The covered industries include:

• Bank, quasi-bank or non-bank financial intermediary, finance companies, or insurance, surety, fidelity or annuity companies.

• Shipping and airline companies

• Pre-need companies on sale of pre-need plans, as provided under Section 186 of the Tax Code

•  Educational Institutions, with respect to the issuance of the taxable certificate, such as Diploma, Transcript of Records and other documents as certificates under Section 188 of the NIRC of 1977, as amended.

• National Government Agencies and their instrumentalities, including Government-Owned or Controlled Corporations (GOCCs), Local Government Units (LGUs) except barangays, with respect to the documents taxable as certificates under Section 188 of the NIRC of 1977, as amended.

• Notaries public, including those employed in law firms and other offices, whether public or private.

• Such other industries as may be required by the Secretary of Finance, upon the recommendation of the Commissioner, through the issuance of revenue regulations.

Moreover, this enhanced system acts as a “revenue multiplier” by ensuring that every taxable event is captured and accounted for.

The enhanced eDST System provides taxpayers with two distinct enrollment modules: the Deposit Module and the Non-Deposit Module. Under the Deposit Module, taxpayers are required to make an advance deposit into their designated eDST ledger account.

Each time a document requiring documentary stamps is processed, the corresponding DST amount is automatically deducted from the available balance in the ledger. This Module is particularly advantageous for taxpayers with frequent or high-volume transactions, as it eliminates the need for repeated manual remittances.

This approach ensures seamless transactions, minimizes administrative burden and provides taxpayers with greater control and visibility over their DST obligations. By encouraging taxpayers to use this module, the government will effectively secure tax revenue in advance and ensure a steady and predictable flow of revenue into the national coffers.

On the other hand, the Non-Deposit Module allows taxpayers to generate documentary stamps immediately without the need for a prior deposit. Instead of automatic deductions, the total DST due on all taxable documents prescribed under Section 188 of the Tax Code, as amended, during the month must be remitted in full within five days after the close of the month in which the taxable document was made, signed, accepted or transferred. The Non-Deposit Module offers flexibility for taxpayers who prefer to manage their DST payments periodically rather than through advance funding.

In addition, the regulation strictly prohibits the use of loose documentary stamps and constructive affixtures (such as manually stamping documents) for any transactions that fall under the coverage of the eDST system. This prohibition is intended to promote and strengthen greater transparency and accountability. Digital audit trails generated by the eDST system significantly reduce opportunities for misreporting, document tampering or revenue leakage. An exception is allowed for taxable documents prescribed under Section 188 of the Tax Code, as amended, where the DST payable amounts to P30.00 or less, provided such documents are not otherwise required to be processed electronically through the eDST system or covered by the constructive affixture of a documentary stamp, as the case may be.

Beyond this narrow allowance, the regulation makes clear that taxpayers are not permitted to use multiple loose stamps to cover higher DST liabilities, nor are they allowed to purchase loose stamps in advance for future use. These restrictions are designed to prevent recycling of previously used stamps, ensure proper monitoring of tax payments and maintain the integrity of the eDST system as the primary mechanism for documentary stamp tax compliance.

In an era where efficiency and trust in public institutions are paramount, RR 28-2025 stands as a forward-thinking reform – one that moves the Philippine tax system closer to being smarter, faster and more equitable for all.

Lovely Bangate is an associate from the Tax Group of R.G. Manabat & Co. (KPMG in the Philippines), a Philippine partnership and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. The firm has been recognized as a Tier 1 in Transfer Pricing Practice and in General Corporate Tax Practice by the International Tax Review. For more information, you may reach out to Lovely Bangate or Eugene Pulga through [email protected], social media or visit www.home.kpmg/ph.

This article is for general information purposes only and should not be considered as professional advice to a specific issue or entity. The views and opinions expressed herein are those of the author and do not necessarily represent KPMG International or KPMG in the Philippines.