The Philippine Stock Exchange is pushing for a lower stock transaction tax to boost trading volume and increase government revenues.
PSE president and chief executive Hans Sicat said while the proposed removal of the initial public offering tax was a positive move, the reduction in the stock transaction tax would have a more significant impact on the capital markets and revenues for the government.
“When you compare ourselves to Asia and Asean, we are middle to higher level in terms of friction cost. So if you lower the STT even more, the government’s take will be larger because of higher trading volume,” Sicat said.
“It is not increasing the nominal amount but decreasing, because it reduces friction cost per unit and because you are not more competitive in the region, you also see more flows,” he said.
Sicat said when the government shifted from capital gains tax to lower STT, volumes at the stock exchange started going up.
The Securities and Exchange Commission, which was tasked by the Finance Department to review the corporate tax on capital markets, is inclined to remove the IPO tax and increase the STT.