MANILA, Philippines – The Department of Finance (DoF) said over the weekend that it will require listed companies to comply with the minimum public float of 20 percent to maintain their tax incentives.

Finance Secretary Cesar V. Purisima said that the Bureau of Internal Revenue (BIR) will write a letter to the Securities and Exchange Commission (SEC) this week, asking for the enforcement of the 20 percent public float requirement.

“This is as part of the listing requirements of publicly listed companies. If not [they will not comply], the BIR might question the use of the final tax of those who did meet the 20 percent requirement,” Purisima told reporters.

He noted that there are a lot of listed-companies that are below 20 percent.

Meanwhile, BIR Commissioner Kim S. Jacinto-Henares warned that if listed firms will not comply with the 20 percent requirement, they will impose a final tax of 5 percent on net capital gains from the sale of stock of up to P100,000 or 10 percent for the sale of over P100,000.

Currently, the BIR is only imposing a transfer tax of 0.5 percent from the sale of stock of listed companies, which are also exempted from Documentary Stamp Tax.

“As public companies, there’s a requirement that 20 percent should be in a public hand. What we’re encouraging in the capital market is to distribute ownership, to put corporate responsibility and discipline,” Jacinto-Henares.

“I’m telling them, you should maintain the 20 percent public float and we’re giving them six months to comply with it,” she added.

The BIR official has estimated that the average public float of listed companies in the Philippine Stock Exchange is between 5 percent and 10 percent.