DOF hopes for stock trading rise with removal of document stamp tax

MANILA, Philippines - The Philippines’ Finance Department expressed hope that a new law removing documentary stamp taxes (DST) on the sale of shares would offset and boost trading at the Philippine Stock Exchange (PSE). Although Republic Act 9648 will cut government revenues by P1.4 billion a year, buying stocks sold on the bourse remain subject to the 12 percent value added tax (VAT) and the 0.5 stock transaction tax, finance officials said. “We just hope that there will be an increase in the turn-over of transactions in the stock exchange," Finance Department undersecretary Gil S. Betran said in an interview. From January to May this year, the government has already collected P1.64 billion in DST. Earlier, the finance department opposed moves to remove the DST since it will further cut revenues which are sorely needed since government intends to increase and accelerate spending to curb effects of the crisis. Moreover, the government is also under pressure to meet its revenue targets to reduce the budget shortfall. Finance officials also asked lawmakers to cease from approving “negative tax measures" since these would result in higher revenue losses. The law, which was recently endorsed by President Gloria Macapagal-Arroyo, is an extension of an older law that cancelled the DST. However, the law expired in March. Before it was abolished, the DST on stock trading costs P75 centavos for every P200 of the par value of the any stock sold in the PSE. - GMANews.TV