Special Report: Which stocks are affected by the Senate version of the Tax Reform?

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Our Partner Broker’s Analysis

The Senate last week approved the first package of the new tax reform bill. Senator Drilon said the bill would face the bicameral committee this week, where the House and Senate would reconcile the differences of their respective versions. Deadline for the final approval of the bill is December 15, before the session closes for Christmas break. Renewed optimism on the passage of the TRAIN Bill may spur rally of the market today.

Here are some of the salient provisions of the Senate’s version of the tax reform bill.

 

1. Fuel Excise Tax

Staggered PHP 3.00 / PHP 5.00 / PHP 6.00 additional tax in 2018 / 2019 / 2020

Our view: We expect retail sales volume of listed companies such as …

 

2. Sugar-Sweetened Beverage Tax

PHP 4.50 per liter tax rate for caloric and non-caloric sweeteners, and PHP 9.00 per liter tax for softdrinks

Our view: We clarify that milk and coffee are not included in the additional tax being proposed by the Senate and the Congress. However, we remain underweight on the stock of …

 

3. Automobiles

10% tax on cars with net manufacturing price of PHP 1.0 million and below, while PHP 1.0 million and up will be levied 20%.

Our view: The more simplified version, if passed, could be viewed as positive for the company …

 

4. Real Estate

VAT exemption for leases below PHP 15k/month, and mass housing worth less than PHP 2.0 million and located outside Metro Manila

Our view: If this will be retained in the final version of the first package of the TRAIN, we believe it will be beneficial for housing developers such as …

 

5. Mining and Coal Excise Tax

For metallic and non-metallic minerals, double excise tax from 2% to 4%. For coal, PHP 10/MT to PHP 100/MT, PHP 200/MT, and PHP 300/MT in 2018, 2019, and 2020

Our view: We retain our view that the increase in cost will be passed on to consumers, which should …

 

6. Others

Double existing doc stamp to PHP 3.00 and sales tax of stocks to PHP 1.50

Our view: The additional sales tax, if approved, will result to additional friction costs for investors trading in our market. This may likely result to decrease in trading activity in the short-term.

 

This report is prepared by PinoyInvestor’s partner broker below. Sign up to this stock broker to avail of their complete trading brokerage services:

AP Securities (formerly Angping & Associates Securities)
AP Securities (formerly Angping & Associates Securities)

AP Securities (formerly Angping & Associates Securities) is one of PinoyInvestor’s partners in delivering superior and reliable stock research reports that help Filipino investors make smart stock investing decisions! Learn more about them here.