MANILA, Philippines - Bureau of Internal Revenue Commissioner (BIR) Kim Henares said she's "open" to a compromise on how to tax the trading of shares of publicly-listed companies that don't meet the Philippine Stock Exchange's 10% public float requirement.
Henares was reacting to a proposed change in the rules of the Philippine Stock Exchange, posted on the exchange's website for comments Friday. The change would require approval of the Securities and Exchange Commission.
Under the proposal, companies with less than 10% float will have one year, not the current 3 years, to boost public ownership or be delisted. In a phone interview, PSE President Hans Sicat said he hoped the "massive" shortening would persuade the government to give companies one year more.
The government says trading of shares of companies that don't meet the minimum public float should be subject to the capital gains tax – which is 5% or 10%, depending on the amount -- not the stock transaction tax – which is 0.5%.
It earlier said it would implement this by the end of this month, prompting some companies to sell additional shares this year.
San Miguel Corp., for one, cited this as a reason for its share sale in May.
"I wouldn't say my mind is closed," Henares said, also in a phone interview. "We can agree to a curing period provided we can be assured that 'this is it.' No more movement."
Sicat, who was interviewed before Henares, said talks with the government were progressing.
"We are being given the opportunity to be heard," Sicat said in a phone interview. "There's no final resolution yet. We're trying to be cooperative. There's no point in trying to confuse the market. We want an orderly market. We want appropriate market float. We are hoping this is directionally there."
He said of 41 companies that don't meet the minimum public float, 7 are in the high 9% range.
For companies that will eventually be delisted, the exchange is proposing controlling shareholders make a tender offer for the shares of minority owners.