PSE wants public float rule delayed
The Philippine Stock Exchange wants a one-year suspension of the rule imposing higher capital gains tax on stock transactions of listed companies with limited public float.
An informed source said the PSE had asked one of its “respected” directors to negotiate with the Finance Department and the Bureau of Internal Revenue for a one-year suspension of the rule and come up with the “win-win” solution.
The PSE is hopeful that Finance and the BIR would agree to the suspension.
The one-year suspension would give some 40 listed companies ample time to comply with the 10- percent public float requirement, the source said.
The PSE earlier gave listed companies with a public ownership of below 10 percent until the end of the year to widen their float.
The Securities and Exchange Commission said it also gave listed companies with public float of less than 10 percent within the year to widen their public float to avoid penalties and possible delisting.
The BIR last month informed the PSE that listed companies that failed to meet the minimum 10-percent float would no longer be considered publicly listed for tax purposes. It said trading transactions involving the errant companies should be charged with higher capital gains tax.
BIR plans to strictly impose the 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 for publicly listed companies that do not maintain the 20-percent float.
The BIR said the public float of listed companies should between 10 percent and 33 percent, depending on market capitalization, in order to qualify as a publicly listed company.
It said listed companies should maintain, if not surpass their initial public offering requirement, to continually enjoy the preferential tax rate of 1/2 of 1 percent of the gross selling price.
Listed companies with public ownership of less than 10 percent are state-owned PNOC-Exploration Corp., Eton Properties Philippines Inc., Metro Pacific Tollways Corp., San Miguel Purefoods Co. Inc., Petron Corp., Atok-Big Wedge Co., Alphaland Corp., Polar Property Holdings Corp., PLDT Communications and Energy Ventures Inc., Makati Finance Corp., EasyCall Communications Philippines Inc., Republic Cement Corp., Manchester International Holdings Inc., United Paragon Mining Corp., Aboitiz Transport System Corp., Euro-Med Laboratories Phils. Inc. and Keppel Philippines Marine Inc.
PSE president Hans Sicat earlier said that the government’s move to impose higher capital gains tax on transactions against companies that fail to meet the minimum public ownership may have contributed to the market’s decline.
He said some investors were staying away from the market until the issue was cleared up.
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