NEWSFLASH

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STOCK MARKET TAXES EXCESSIVE, SAY TRADERS

Manila, Oct. 1, 1997 - The Philippine Stock Exchange (PSE) is appealing to President Ramos and to Congress to ease the burden of "excessive" taxes which are right now hampering the expansion of the securities industry.

In a statement released to media, PSE vice president Jose Alcantara said taxes in the Philippines are the heaviest in Asia. He pointed out that unless the situation is rectified, "the effect is a complete reversal to the objective of government to develop the capital market through wider participation of companies and investors."

Initial Public Offerings (IPO) are charged a tax of between one percent and four percent, depending on the size of the IPO in relation to the outstanding shares of the company. In addition, brokerage firms are charged a transaction tax totalling one half of one percent and P20,000 plus 10% VAT as a clearing fee.

Another tax is the stamp duty of P1.50 for every P200 par value of stock transferred, even today when trading is no longer done on paper.

To "allow the market to mature," Alcantara is proposing that Congress pass a law scrapping the stamp tax, deferring the VAT for five years and reducing the transaction tax to one- fourth of one percent. He is also recommending the reduction of fees charged by the Securities and Exchange Commission.

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