SEC backs stock trade tax cuts
The proposal aims to bring the stock transaction tax, or STT, down to 0.1 percent of the stock value from the current rate of 0.6 percent
The proposal aims to bring the stock transaction tax, or STT, down to 0.1 percent of the stock value from the current rate of 0.6 percent
Regulator Securities and Exchange Commission or SEC supported the proposal to reduce taxes on stock transactions to boost and improve the competitiveness of the capital market.
House Bill 8958, or the proposed Capital Markets Efficiency Promotion Act, is pending with the House of Representatives. It seeks to lower taxes on stock transactions to attract more investors into the market.
The bill has since undergone deliberations at the committee level and has been substituted by House Bill 9277, filed on 21 September.
The proposal aims to bring the stock transaction tax, or STT, down to 0.1 percent of the stock value from the current rate of 0.6 percent. The tax on dividends of foreign non-residents will likewise be reduced to 10 percent from 25 percent.
Albay Rep. Joey Salceda, who also heads the House Ways and Means Committee, hopes that the lower taxes will bring the local bourse at par with regional counterparts, and encourage more local and foreign investors to participate in the capital market.
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"The SEC welcomes the efforts of our legislators to boost the capital market, as this recognizes the contribution and potential of the financial sector to help in the development of the Philippine economy, toward easing and improving the lives of all Filipinos," SEC chairperson Emilio Aquino said.
Strong coordination with Congress
"We will work closely with our lawmakers to ensure that new laws and policies will be reflective of the needs and demands of the market and investors, while still balancing the Commission's role as regulator," he added.
The SEC has been stepping up efforts to encourage more investors into the capital market.
Recently, the SEC shortened the settlement cycle from three days to two days after the trade date by amending the 2015 Implementing Rules and Regulations of Republic Act 8799, or the Securities Regulation Code, through SEC Memorandum Circular No. 11, Series of 2023.
Funding portals have also been empowered by the SEC to act as registrars of qualified institutional and individual buyers, which eliminates the need for these portals to use third party institutions to assist potential investors with their applications as qualified buyers.
Further, the SEC has cited the potential of short selling to boost trading activity in the Philippines as shown by the approval of the Philippine Stock Exchange Guidelines on Short Selling Transactions in 2018.
