Bill overhauling stock taxation system filed

 (By JAMES A. LOYOLA)

A bill proposing to revamp the tax system for the stock market has been filed with the House of Representatives to spur its development and arrest its marginalization in the regional market.

The bill, dubbed as “Stock Market Competitiveness Act or SMARTCA,” was introduced as House Bill No.7111 by Congressman Exequiel B. Javier, the chairman of the House Committee on Ways and Means.

“We welcome with much appreciation this legislative development because of the urgent need to develop our stock market,” said Philippine Stock Exchange president Francis Lim.

He noted that “it is unfortunate that even if we are one of the oldest bourses in Asia, we continue to lag behind other Asian markets in terms of market capitalization, number of listed companies, value turnover and capital raising activities. Our size as a market is a major deterrent to our competitiveness in the region.”

The main features of the bill are to grant a lower income tax rate of 25 percent instead of 30 percent for a period of 10 years to companies that list their shares with the stock exchange within a limited period of 5 years from the effectivity of the law.

It also removes the initial public offering or IPO tax, and reduce the stock transaction tax (STT) to one fourth of 1 percent from its present rate of half a percent. Click here to read more...