THE Securities and Exchange Commission (SEC) has backed a proposed legislative measure to reduce the taxes on stock transactions, which it expects to help boost the domestic capital market.
In a statement on Tuesday, the SEC said it supports House Bill (HB) No. 9277 filed on Sept. 21 which seeks to lower the stock transaction tax (STT) to 0.1% of the stock value from the current rate of 0.6%. The bill also aims to reduce the tax on dividends of foreign nonresidents to 10% from 25%.
“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 B. Aquino said.
“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.
HB 9277, which is pending at the committee level, is a substitute bill to HB 8958 filed by Albay Rep. Jose Ma. Clemente S. Salceda on Aug. 23. HB 8958 also proposed lower taxes on stock transactions to encourage greater participation of local and foreign investors in the Philippine capital market.
Meanwhile, the SEC said it had been implementing initiatives to urge more investors into the capital market such as the shorter settlement cycle to two days from three days.
The corporate regulator also empowered funding portals to act as registrars of qualified institutional and individual buyers of securities, removing the need to use third-party institutions and helping potential investors with their application 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,” the commission said. — Revin Mikhael D. Ochave