BIR consults public on new capital markets tax law

The Bureau of Internal Revenue (BIR) held a public consultation on June 23, 2025, to gather feedback on the proposed implementing rules for the newly signed Republic Act No. 12214, or the Capital Markets Efficiency Promotion Act (CMEPA), a sweeping reform aimed at improving the country’s capital market landscape.

The session, held at the BIR National Office in Quezon City, brought together tax experts, financial market stakeholders, legal practitioners, and both public and private sector representatives to assess the operational impact of CMEPA’s provisions and ensure a transparent rollout of the new rules.

RA No. 12214, signed into law by President Ferdinand R. Marcos Jr. on May 29, 2025, is designed to harmonize passive income taxation, attract foreign investments, and lower capital transaction costs to create a more competitive and efficient investment climate in the Philippines.

“With RA No. 12214 now in force, financial institutions and businesses are expected to align their compliance protocols with the revised tax rules under the CMEPA,” said BIR Commissioner Romeo D. Lumagui Jr.

Deputy Commissioner Marissa O. Cabreros opened the session by emphasizing the importance of stakeholder engagement in crafting fair and effective tax policies.

OIC-Deputy Commissioner Larry M. Barcelo of the Legal Group presented the law’s key features, including the reduction of the Stock Transaction Tax from 0.6% to 0.1%, the adoption of a flat 20% final withholding tax on most interest income, alignment of capital gains tax rates on foreign and domestic shares, and revisions to the Documentary Stamp Tax (DST) structure.

Barcelo highlighted that these tax adjustments aim to streamline compliance, broaden market participation, and maintain revenue neutrality.

Group Supervisor Mariesol Girang of the Regular Large Taxpayers Audit Division (RLTAD) 2 discussed the proposed regulations on passive income taxation, followed by RLTAD 2’s Nelsie Arcolas, who detailed the Stock Transaction Tax implementation.

Monserrat Venus Axalan, Chief of the Audit Information, Tax Exemption, and Incentives Division (AITEID), covered rules on Personal Equity and Retirement Accounts (PERA), while Marivic Bautista of the Excise Large Taxpayers Audit Division (ELTAD) 2 presented the taxation guidelines for financial instrument pick-ups.

Atty. Edgar Allan Reyes II from the Legal and Legislative Division walked participants through the proposed amendments to Documentary Stamp Tax rates and exemptions, identifying which documents will now be subject to the revised DST.

An open forum, moderated by Atty. Brianna Kay T. Delos Santos and Atty. Raymund L. Ipio, allowed stakeholders to raise concerns and offer suggestions on how the regulations could impact their operations.

The session concluded with Barcelo reiterating the BIR’s commitment to transparent, fair, and inclusive tax reform implementation, assuring participants that all feedback will be considered in finalizing the revenue regulations.

CMEPA is seen as a critical part of the Marcos administration’s broader agenda to enhance economic competitiveness, simplify tax compliance, and expand the investor base, especially as regional financial hubs continue to modernize their tax regimes.