Listed firms given one year to comply with minimum public ownership rule

MANILA, Philippines - The Bureau of Internal Revenue (BIR) has agreed to give listed companies a reprieve of 12 months or until Jan. 1, 2013 to comply with the minimum public ownership requirement set by the Securities and Exchange Commission (SEC).

BIR Commissioner Kim Henares said that the time is enough for companies to comply with the requirement of the SEC, the country’s corporate regulator and hence, be entitled to preferential tax treatment.

However, BIR Commissioner Kim Henares said the Jan. 1, 2013 deadline should no longer be extended. “After that, those who cannot comply should be delisted,” Henares said.

The Philippine Stock Exchange earlier proposed to give listed companies 12 months to comply with the minimum public ownership requirement and this was approved by the SEC.

After the Jan. 1, 2013 deadline, companies with less than 10 percent public ownership requirement will not be allowed to trade in the local bourse and will not be entitled to preferential tax treatment.

Furthermore, according to the revised rules, the PSE will impose a trading suspension on non-compliant companies. These erring companies will be suspended for a period of no more than six months.

A full delisting will be implemented if companies remain non-compliant.

According to data from the PSE, there are at least 40 companies who have yet to comply with the public ownership requirement.

Henares said the government has no problem granting preferential tax treatment as long as companies are also compliant with the requirements.

The Department of Finance and BIR want to slap a capital gains tax on listed companies with public floats that fall below the minimum 10 percent but the PSE said the capital gains tax should only be imposed when companies are delisted.

The BIR is stepping up efforts to meet its revenue target of P1.066 trillion this year, the first time that the collection goal has hit the P1-trillion mark.

For 2011, the agency had a collection target of P940 billion. The BIR has yet to announce the final figure for last year.