The Securities and Exchange Commission (SEC) said the newly enacted Capital Markets Efficiency Promotion Act (CMEPA) is poised to enhance investor savings and stock market liquidity, syncing the country’s tax regime with regional and global standards.
The law that took effect in July slashed the stock transaction tax from 0.6 percent to 0.1 percent, previously the highest in Southeast Asia. SEC chairman Francis E. Lim said the reduced rate encourages market participation, especially in bulk trades, allowing investors to reinvest more capital.
Other key reforms include:
- Standardized tax treatment on interest income across deposit types, removing penalties on short-term savings.
- A flat 15 percent capital gains tax on shares of foreign corporations, harmonizing with global norms to attract foreign investors.
- Expanded retirement savings incentives through the Personal Equity and Retirement Account (PERA), offering employers a 50 percent additional tax deduction on matched contributions.
- A reduced documentary stamp tax on share issuance, from 1 percent to 0.75 percent, lowering capital-raising costs for companies.
The SEC said CMEPA strengthens the country’s capital markets, supports investor confidence, and promotes broader financial inclusion.
