Friday, May 29, 2009 | MANILA, PHILIPPINES
Banking & Finance
THE HOUSE of Representatives ratified Tuesday night a bill scrapping the documentary stamp tax (DST) on stock market transactions, with the Senate promising to follow suit next week.
House Bill (HB) 4900 seeks to exempt the sale, barter or exchange of shares of stock listed and traded through the stock exchange from DST, leaving the stock transaction tax and the value-added tax (VAT) as the only taxes levied on trading at the local bourse.
The DST amounts to 75 centavos per every P200 par value.
Antique Rep. Exequiel B. Javier, House ways and means committee chairman, said the House simply adopted Senate Bill (SB) 3203 approved on third reading Monday night.
"Senate amendments were accepted by the House and the House bill as amended was ratified last Tuesday," he said in a text message.
"The bill is for immediate signing into law by the President, possibly before the second regular session ends."
Under the original House proposal, the DST exemption would be enjoyed only for five years. Senators did not impose a limit.
A member of the legislative staff of Senator Panfilo M. Lacson, chairman of the Senate ways and means committee, said SB 3203 would likely be ratified next week.
Francis Ed. Lim, Philippine Stock Exhange (PSE) president, said the lifting of the DST on stock market transactions would boost investments in the local bourse as it would lower the cost of trading.
"One of the big issues that we have been contending with is the low investments in the stock market due to high transaction costs. Aside from the DST, investors would have to pay the stock transaction tax, making transactions double-taxed. This bill encourages investors to do more trading in Philippine stocks," he said in a telephone interview yesterday.
"We are also looking at the possibility of asking Congress to reduce the rate of the stock transaction tax in the near future," he added.
Other fees and taxes investors in the stock market pay are:
- a brokerage commission, involving a maximum of 1.5% of the transaction cost plus VAT;
- a transfer fee of P100 plus VAT;
- a cancellation fee of P20 plus VAT; and
- a Securities Clearing Corp. of the Philippines fee of 0.0001 x value of transaction. — Jhoanna Frances S. Valdez
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