BIR likely to impose higher taxes on stocks if...

The Bureau of Internal Revenue (BIR) will likely impose higher taxes on stocks should it fail to reach a compromise agreement with the Philippine Stock Exchange (PSE). BIR Commissioner Kim Henares said the bureau will issue a revenue regulation imposing higher taxes on stocks if no compromise agreement with the stock exchange would be reached. The PSE has yet to submit its proposed compromises to the government's main revenue agency, Henares said. Last week, Finance Secretary Cesar Purisima instructed the BIR and PSE to agree on "a win-win formula" to resolve the issue. The BIR had said some listed firms should be levied higher tax charges if they do not meet public-ownership requirements. Listed companies with a public float of less than 10 percent will be slapped with the usual 5-10-percent capital gains tax, according to the bureau. "They are technically no longer compliant with their public ownership status... and are no longer a publicly listed company for taxation purposes," the BIR explained. The PSE, on the other hand, cited Section 127 (a) of the National Internal Revenue Code of 1997 stating that transactions involving shares of stock and traded through the PSE other than the sale by a dealer shall be subject to the tax rate of "one-half of 1 percent." In November last year, the PSE implemented a rule requiring listed companies to maintain a public float of at least 10 percent. — JE/OMG, GMANews.TV