Approval of the third and final reading on a bill that will permanently remove the documentary stamp tax (DST) levied on stock trades has been given by the Philippines Senate.
The move is intended to boost activity on the country's stock market by lowering the cost of investing.
President and Chief Executive of the Philippine Stock Exchange, Francis Lim, has welcomed the news, announcing:
“This is a significant leap in the PSE’s efforts to bring down trading costs in the stock market. We are grateful to our legislators for the attention they have given on this bill."
The bill was first approved in January of this year, where it was noted by Mr Lim that trading on the bourse had noticeably increased since the suspension of the tax:
“Trading activity in the stock market has posted significant increases since 2004 and I think it is no accident that this rise coincided with the suspension of the collection by our government of DST on stock trading," he remarked.
Had the bill not been passed, then a PHP0.75 levy for every PHP200 worth of secondary shares traded would have applied to stock transactions.
The new bill will be added to the growing list of market-friendly laws in the Philippines, such as the Personal and Equity Retirement Account Act and the Credit Information System Act.
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