Lower stock tax to unleash 83% trading acceleration

The implementation of the reduced stock transaction tax next month could theoretically result in an 83 percent surge in value turnover in the Philippine Stock Exchange, although even a fraction of this growth will already be a big boost to the local bourse.

- By JAMES A. LOYOLA

Abacus Securities Corporation noted that when this tax was increased by 20 percent from 0.5 percent to 0.6 percent, starting Jan. 1, 2018, the market's average daily turnover declined by about 11 percent that year.

“With the sharper magnitude in this year's reduction, in theory and assuming the same level of impact but in the opposite direction, value turnover could increase by up to 83 percent,” it added.

However, Abacus pointed out that, “In reality, the positive impact on value turnover will probably be much smaller.