THE ORIGIN OF STAMP TAXES: 

No one ever became a popular hero by virtue of having invented a new tax. Perhaps this is the reason that the name of the person who first conceived the idea of stamp taxes seems to have been lost in the obscurity of the past. Some authorities have claimed that the stamp tax originated in Holland in 1624 as a result of a prize that was offered by the Central Government of the Low Countries to the person who should invent a new tax that would be productive but would not be vexatious. Some Spanish writers have affirmed that the stamp tax originated in Spain and Piernas is said to have declared, “if there is any glory in the invention we (the  Spaniards) can claim it.”  At any rate, stamp taxes were first imposed in Spain by an ordinance of Philip IV, dated December 15, 1636. Two years later, the Royal Decree of December 28, 1638, Philip IV extended stamp taxes to all Spanish Colonies,  effective January 1, 1640. [6]

THE ORDINANCE OF DECEMBER 15, 1636

This Royal Ordinance, which was followed by several enabling decrees, is as  follows:

By Ordinance of Philip IV, of December 15, 1636, issued at the request of the Cortes, it is ordained that to provide both for the necessities of the Reign and for the stability of public and private documents, thereby preventing the frauds and substitutions which occur with the use of  ordinary paper, all Titles and Royal Appointments (Despachos), public contracts, contracts between private persons, judicial actuation, prosecutions, petitions to the King and Authorities, and other documents, shall necessarily be  written on paper which  bears an official stamp (sello) printed at the top of the sheet, and consisting of the Royal Coat of Arms and at one side of this, the name o the King, his titles, the year for which the paper is valid, the class of paper, and its value. The stamp shall be changed each year, the making and printing of this paper being   reserved by the King, who has ordered the creation of four classes of stamps (sellos) according to the nature and monetary value of public instruments, decreeing that without the requisite of the stamp these instruments will not have either value or obligatory force, imposing upon these who violate these provisions corporal   punishments and fines, and also upon those who counterfeit the stamp printed on the paper of the same penalties which are imposed upon those who counterfeit money.[7]

Following the promulgation of the Royal Ordinance above quoted several enabling  decrees were issued that specified the prices of the four classes of stamped paper, the  documents to  be written upon each class of paper, and the manner of selling and accounting for the stamped paper.

THE ROYAL DECREE OF DECEMBER 28, 1638

This Royal Decree, by which Philip IV extended stamp taxes to all Spanish Colonies, including the Philippines, to be effective on January 1, 1640, is quoted in past, as follows:
 

We ordain and command that in each and every part of our Western Indies, Islands and Terra Firma of the Ocean, already discovered and which may be discovered, no contract shall be made or written, no instrument nor appointments which are  minutely detailed by this Law, shall be published, which are not written on stamped paper bearing one of the four stamps (sellos) which for that purpose we have ordered made, with the form, diversity and qualities expressed in this Law, without thereby abolishing the other formalities  which by Law are required for the validation of   instruments, because our wish is to add this new requirement of the stamp as an essential procedure, in order that without that they may not have any effect or value; and from this date, we annul them and render them void, so that they do not at any time have credence, cannot be presented or admitted, either at trial or elsewhere, cannot give any title or right to the litigants; by the same contingency and fact that litigants first lose whatever quantities and sums may have been stipulated, together with the interest, and in addition to this they incur for the first offense a fine of 200 ducats, [8] for the second offense, a fine of 500 ducats, to be paid, one third each, to our Royal House, to the judge, and to the informer; and if the default grows to the third offense, in addition to the said penalties and other pecuniary penalties, used will be made of corporal penalties according to the discretion of him who took cognizance of these cases; and the judges, solicitors, defenders, attorneys, an scriveners  who  permit, present or make the violations incur the said pecuniary penalties and the penalty of perpetual deprivation of their offices, adding to the scriveners the penalties which are imposed by Law upon falsifiers; and one and all have the obligation, under said penalties, of reporting to the magistrates who have jurisdiction in such cases and instruments or appointments lacking this formality which may come into their hands or to their notice, made and executed on the first day of January of the year 1640, or thereafter, which is the date from which we command that in our Kingdoms and provinces of the Indies stamped paper shall be used. In the case of this crime there is a need of an accuser in order to take action officially. And because it is of such nature that it can be committed in secret, which makes the proof difficult, we declare that to make it legitimate the proof of three individual witnesses must be obtained in accordance with this provision of our Royal Laws concerning the investigation of bribes. And it is our will that if anyone should counterfeit the said stamps, engraving or  printing them in violation of that decreed by us, he incurs by the same act the   penalties imposed upon counterfeiters of money, and likewise the penalties imposed upon those who introduce false money in these, our, Kingdoms, in accordance with the Royal  Ordinance of 1638. And it is our will that this shall include all classes of persons, of whatever state, quality and dignity they may be, and that in the form of the stamps, and in the use of them for instruments and appointments, the following shall be noted and observed:

That there are four classes of stamps: first, second, third and fourth.

That on the sheets thus stamped shall be written the contracts, instruments, judicial  decisions, deeds, writs, and other sureties, which are made and executed in our  Kingdoms and provinces of the Indies, in accordance with the quality of each class.

On the stamped paper of the first class shall be written all the letters of pardon and mercy which may be issued in the provinces of the Indies by our Viceroys, presiding judges, audiencias (Supreme Courts), central auditing offices, governors, Captains-General, magistrates, and any other minister of justice, war and finance, and if such letter should require more than one sheet, all the other sheets shall be written on stamped paper of the third class.

Stamped paper of the second class shall be used for the first sheet of all deeds,  testaments and  contracts, of whatever class or form that may be, which must be executed before a notary; and the subsequent sheets in the judicial records and registers must be written on stamped paper of the third class.