The Department of Finance (DOF) has highlighted the newly implemented Capital Markets Efficiency Promotion Act (CMEPA) as a package of tax changes intended to reduce investment frictions and lower barriers for retail participation in the Philippines’ capital markets, while encouraging Filipinos to diversify their savings and investments. Key measures include cutting the stock transaction tax on the sale or exchange of shares from 0.6% to 0.1%, reducing documentary stamp tax on the original issuance of corporate shares from 1% to 0.75%, and making documentary stamp tax on mutual funds and unit investment trust funds tax-exempt. CMEPA also introduces a uniform 20% final withholding tax on interest income regardless of instrument tenure, removes tax exemptions on passive income earned by government-owned and controlled corporations, and was framed by the DOF alongside government savings options such as Pag-IBIG MP2 and Retail Treasury Bonds; the DOF cited a Bangko Sentral ng Pilipinas survey showing 8 million out of 77 million Filipino adults own investment products.
Department of Finance (Philippines) 2025-07-20
Philippines Department of Finance promotes Capital Markets Efficiency Promotion Act cutting stock transaction tax to 0.1%
The Department of Finance (Philippines) has enacted the Capital Markets Efficiency Promotion Act (CMEPA) to ease investment barriers and boost retail participation. Measures include reducing the stock transaction tax from 0.6% to 0.1%, cutting the documentary stamp tax on corporate shares from 1% to 0.75%, and exempting mutual funds and unit investment trust funds from this tax. CMEPA also introduces a uniform 20% final withholding tax on interest income and removes tax exemptions on passive income for government-owned corporations.