The Securities and Exchange Commission said it plans to increase by 20 percent the fines and penalties imposed on corporations for the late and non-filing of certain annual reports to boost compliance with reportorial requirements.
It said it had drafted guidelines on the updated scale of fines for the late and non-submission of audited financial statements, general information sheet and other reportorial requirements.
Under the proposed adjusted rates, the SEC will raise the penalty by 20 percent from the base penalty per offense. The monetary penalty would be imposed on a per-report and per-year basis.
The scale of penalties would be based on the retained earnings for domestic stock corporations, fund balance for domestic non-stock corporations and accumulated income for foreign stock corporations, including branches, representative offices and regional headquarters as well as foreign non-stock corporations.
For domestic corporations with retained earnings of less than P100,000, the SEC will impose a base fine of P5,000 for the first offense and up to P9,000 for the fifth offence for late, plus P1,000 monthly fine for every month of continuing violation for late filing of reports.
For non-filing of reportorial requirements, SEC will charge domestic firms with fines amounting to P10,000 for the first offense up to P18,000 for the fifth offense.
Meanwhile, foreign corporations with accumulated income of less than P100,000 would be charged with P10,000 fine for the first offense, up to P18,000 for the fifth offence for late filing of reportorial requirements.
A lower fine of P5,000 for the first offense up to P9,000 for the fifth offense, plus P1,000 per month of continuing violation would be charged to foreign non-stock corporations with the same accumulated income.
The SEC said that aside from the monetary fines, it may also declare a corporation under delinquent status in case of failure to submit reportorial requirements for three times consecutively or intermittently within five years.
A fourth offense may also constitute a revocation of a corporation’s registration if it has been given reasonable notice regarding its delinquent status.
