Signed by President Ferdinand Marcos Jr. on May 29, Republic Act No. 12214 slashes the stock transaction tax from 0.6 percent to 0.1 percent and reduces the documentary stamp tax on new share issuances from 1 percent to 0.75 percent.
The PSE, led by president and CEO Ramon Monzon, said the reforms are expected to boost trading activity, improve liquidity, and enhance the Exchange’s competitiveness against regional markets.
The new law also broadens the application of the stock transaction tax to other securities, paving the way for more product offerings. The PSE added that the changes will help simplify the tax regime and support capital market development.
SEC chairperson Emilio B. Aquino welcomed the law, calling it “a key piece of legislation that strengthens our ability as regulator to create an environment that not only increases capital market accessibility to more Filipinos, but also builds trust and confidence in long-term investing.”
“Together, these significant tax reforms pave the way for a more dynamic capital market that will foster a robust and investor-friendly financial ecosystem,” he added.
Among CMEPA’s other provisions are the removal of taxes on mutual fund and UITF income, harmonization of capital gains tax on foreign shares at 15 percent, and a uniform 20 percent withholding tax on interest income.
The law also gives private employers an additional 50 percent tax deduction if they match or exceed their employees’ contributions to PERA, the country’s voluntary retirement savings program.
