Lower stock transaction tax takes effect next month

MANILA, Philippines — Lower stock transaction tax as part of the passage of the Capital Markets Efficiency Promotions Act (CMEPA) will take effect starting next month, according to the Philippine Stock Exchange.

The PSE said that under Section 17 of Republic Act 12214 or CMEPA, the stock transaction tax was decreased to one-tenths of one percent from six-tenths of one percent of the gross selling price or gross value in money of the shares of stock sold, exchanged or otherwise disposed.

The commission said that Section 29 of CMEPA states that the law shall take effect on July 1, 2025, following its complete publication.

“On the premise that publication of CMEPA will be completed before July 1, 2025, the stock transaction tax of one-tenths of one percent shall apply to transactions through the exchange made on July 1, 2025 onwards,” it said in an advisory.

The PSE earlier said  the immediate reduction of the stock transaction tax to 0.1 percent from 0.6 percent is a much-awaited reform that is expected to boost trading activity and liquidity in the stock market.

The decrease is likewise seen enhancing the PSE’s competitiveness against other foreign markets.

Prior to the enactment of CMEPA, the PSE said it had one of the highest friction costs in the ASEAN.

“CMEPA also expands the application of stock transaction tax to other securities listed and traded through a local stock exchange which lends certainty to the tax regime applicable to the secondary transfer through the stock exchange of asset classes other than equities and facilitate the launch of more products in the local stock market,” the PSE said.