Higher stock tax detrimental to trade volume — PSE
An increase in the stock transaction tax under the ratified tax reform package would adversely affect stock market volume, Philip- pine Stock Exchange president and CEO Ramon Monzon said Wednesday night.
In an interview, Monzon said the planned increase was supposed to be in the fourth package of the Duterte administration’s tax reform plan but was suddenly included in Package 1.
He said this would definitely affect the volume in the market and may discourage some investors from parking their funds in the Philippine stock market.
Monzon said among the sectors that may be discouraged or may be affected by the hike in taxes are the foreign fund managers who invest huge amount of funds in the market. Congress ratified the final version of the first package of the Tax Reform for Acceleration and Inclusion (TRAIN) bill, which is expected to generate P130 billion in revenues.
Part of the tax reform package is an increase in stock transaction tax from 0.5 percent of one percent on gross selling price to 0.6 percent.
Monzon said this is not negligible and could affect investment activities in the market.
This was supposed to be slapped at a later time or under Package 4 of the tax plan, which focuses on capital income taxation.
The approved tax package also called for an increase in the takehome pay of workers but also hiked taxes on fuel, vehicles and sugarsweetened beverages while expanding the value-added tax (VAT) base.
President Duterte is expected to sign the package into law on Dec. 19.
The expected approval of the socalled tax reform bill was delayed by a last-minute disagreement over exempting local coal from the proposed higher levy on coal taxes.
The TRAIN was supposed to be ratified as early as last Tuesday.
But the ratification of the measure, which seeks to raise P130 billion in revenues and overhaul the country’s 20-year-old tax regime, proceeded at the last minute before Congress takes a break.
The bill is intended to bankroll the administration’s ambitious Build Build Build infrastructure program.