The Philippines Department of Finance-backed Capital Markets Efficiency Promotion Act (Republic Act No. 12214) has taken effect, with the government marking the milestone at the Philippine Stock Exchange and committing to its implementation. The law introduces tax and market reforms intended to lower transaction costs and widen participation in Philippine capital markets. Key measures include reducing the Stock Transaction Tax from 0.6% to 0.1%, removing the Documentary Stamp Tax on mutual funds and unit investment trust funds, and cutting the Documentary Stamp Tax on the original issue of shares from 1% to 0.75%. The Act also applies a uniform 0.75% Documentary Stamp Tax to bonds, debentures, and certificates of stock or indebtedness issued in foreign countries, clarifies the definitions of “passive income” and “securities” to support consistent tax treatment, and standardizes the tax on interest income at 20%. For retirement savings, private employers that match or exceed employee contributions to Personal Equity and Retirement Accounts are entitled to an additional 50% tax deduction on their actual contributions; the Department of Finance projects the package will generate over PHP 25 billion in revenues from 2025 to 2030.
Department of Finance (Philippines) 2025-07-02
Philippines Department of Finance marks effectivity of Capital Markets Efficiency Promotion Act cutting stock transaction tax to 0.1%
The Philippines' Capital Markets Efficiency Promotion Act (Republic Act No. 12214) has taken effect, introducing tax and market reforms to lower transaction costs and broaden participation. Key measures include reducing the Stock Transaction Tax to 0.1%, removing the Documentary Stamp Tax on mutual funds, and standardizing the tax on interest income at 20%. The Act is projected to generate over PHP 25 billion in revenues from 2025 to 2030.