BIR asks banks, companies to adopt new capital market tax rules

The Bureau of Internal Revenue (BIR) has urged financial institutions and businesses to align their compliance protocols with Republic Act (RA) No. 12214, also known as the Capital Markets Efficiency Promotion Act (CMEPA).

“With RA No. 12214 now in force, financial institutions and businesses are expected to align their compliance protocols with the revised tax rules under the CMEPA,” BIR Commissioner Romeo Lumagui Jr. said.

The BIR held a public consultation on CMEPA on June 23, 2025, at the BIR National Office in Quezon City. The event brought together tax professionals, financial market participants, legal experts and representatives from both public and private sectors to discuss the major tax reforms introduced by RA No. 12214.

President Ferdinand R. Marcos, Jr. signed the CMEPA into law on May 29, 2025. The legislation aims to streamline the taxation of passive income, encourage foreign capital inflow, and foster a more efficient and competitive Philippine capital market.

Deputy commissioner Marissa Cabreros of the operations group formally opened the consultation, setting the tone for discussions on proposed Revenue Regulations to implement the law.

OIC-deputy commissioner Larry Barcelo of the legal group presented the salient features of the CMEPA, highlighting its key objectives: harmonizing the taxation of passive income, attracting and retaining foreign investments, reducing transaction costs, and improving revenue efficiency without compromising fiscal prudence.

He outlined major tax policy shifts, including the reduction of the stock transaction tax from 0.6 percent to 0.1 percent, the imposition of a flat 20 percent final withholding tax on most interest income, the alignment of capital gains taxes on foreign and domestic shares and new documentary stamp tax rules.

Group supervisor Mariesol Girang of Regular Large Taxpayers Audit Division (RLTAD) 2 discussed proposed regulations on passive income. She was followed by RLTAD 2 Group supervisor Nelsie Arcolas, who discussed the proposed Revenue Regulations on Stock Transaction Tax.

Chief Monserrat Venus Axalan of the audit information, tax exemption and incentives division (AITEID) discussed proposed regulations governing the taxation of Personal Equity and Retirement Accounts (PERA).

Group supervisor Marivic Bautista of excise large taxpayers audit division (ELTAD) 2 presented proposed revenue regulations on the taxation of pick-ups.

Edgar Allan Reyes II of the legal and legislative division presented proposed regulations on documentary stamp tax, focusing on rate adjustment and amendments to documents not subject to the tax.

An open forum, moderated by Brianna Kay Delos Santos and Raymund Ipio, followed the presentations. Attendees posed questions and offered comments on the operational impact of the new tax provisions under the proposed regulations to implement CMEPA.

OIC-deputy commissioner Larry Barcelo of the legal group reaffirmed the BIR’s commitment to transparent and fair implementation of the tax reforms.