Investors will have to deal with a higher stock transaction tax beginning today — the first trading day of 2018 — in the wake of the January 1 implementation of the Tax Reform for Acceleration and Inclusion (Train) Act.
The law mandates a 10-basis point (bps) increase in the tax, to 0.6 percent from 0.5 percent previously, that will be levied on the sale, barter, exchange, or any other disposition of stocks listed and traded through the Philippine Stock Exchange (PSE).
“Please be informed that Section 87 of Republic Act No. 10963, or Train law, states that the law shall take effect on January 1, 2018, following its complete publication in the Official Gazette or at least one newspaper of general circulation,” the bourse said in a memorandum.
A copy of the Train law was published in a newspaper just before the year ended and it has likewise already posed in the Official Gazette.
PSE President Ramon Monzon has objected to the higher tax, claiming it would make local bourse “uncompetitive” as the 0.5 percent levy was already the highest in the region.
Securities and Exchange Commission Chairman Teresita Herbosa, however, told The Manila Times that she remained optimistic.
“You know investors, I think especially the institutional investors, they won’t mind the increase as long as the market is fair and transparent,” she added.
Summit Securities, Inc. President Harry Liu said the tax hike would cost “a bit”. He echoed Herbosa’s view, however, saying the increase would likelu not prove a hindrance to foreign investors.
“If the business is good, there will be a good return,” Liu said.