THE SENATE and the House of Representatives on Wednesday ratified the bicameral conference report on a measure that seeks to cut the tax on stock transactions to 0.1% from 0.6%, a move that experts hope will boost the Philippine stock market.
At the same time, Congress also ratified the bicam report on the measure that will raise the capital of the Development Bank of the Philippines (DBP).
“We have come up with a piece of legislation that seeks to promote capital market development, increase capital mobility, and enhance financial inclusion,” Senator Sherwin T. Gatchalian said, referring to the Capital Markets Efficiency Promotions Act.
“A more efficient capital market means more opportunities, greater financial inclusion, and stronger economy that works for all.
Mr. Gatchalian said lawmakers agreed to reduce the documentary stamp tax (DST) on original issue of shares of stock to 0.75% from 1% of the par value of the shares of stock.
It will also exempt DST on the original issuance, redemption or other disposition of shares or units of participation in a unit investment trust fund.
Mr. Gatchalian said the move would ease the financial burden on investors and allow them to maximize their earnings without needless taxes.
He said the bill will also introduce an allowable deduction of 50% of an employer’s contribution to their employees’ personal equity and retirement accounts, which would incentivize businesses to encourage workers to prepare for retirement.
A copy of the bicameral conference committee report of the measure was not immediately available.
Based on a forecast by the Philippine Stock Exchange, the lowering the stock transaction tax to 0.1% would boost stock market’s trading volume to P4.9 trillion by 2029.
Meanwhile, the Senate also ratified bicameral conference committee report of the new DBP charter, which would boost the lender’s authorized capital stock to P300 billion from P35 billion.
The measure mandates that the National Government will own 70% of the DBP’s capital stock at all times, with P32 billion or 10.67% being fully subscribed to and paid for by the state. It will also allow the state-run lender to conduct an initial public offering.
“The increased capitalization could be provided to DBP which would give them heightened ability to issue more loans to fund critical projects for priority sectors such as infrastructure health social services and agriculture,” Senator Mark A. Villar, who sponsored the Senate bill, told the plenary floor.
A copy of the bicameral conference committee report on the DBP charter was not available.
“This proposed measure will enable the DBP to continuously support national development goals, ensuring that the benefits of these projects reach ordinary Filipinos in terms of job opportunities, better services, and improved livelihoods,” Mr. Villar said. — John Victor D. Ordoñez
