The Securities and Exchange Commission (SEC) said it is eyeing to raise fines for late submissions by as much as 1,900 percent.
Under the proposed rates, domestic stock corporations with retained earnings of not more than P100,000 will incur a basic penalty of P5,000 for the late filing of their general information sheet (GIS) or annual financial statement (AFS), plus P1,000 for every month of continuing violation.
The SEC noted that the basic penalty of P5,000 is a 900 percent increase from the current rate of P500.
Domestic non-stock corporations with a fund balance or equity of not more than P100,000, meanwhile will also be slapped with the P5,000 basic penalty, but in effect raises the fine by 1,900 percent from the current basic penalty of P250, the SEC said in a statement.
“Meanwhile, non-filing of GIS or AFS by domestic stock corporations and non-stock corporations with retained earnings and fund balance/equity, respectively, of not more than P100,000 will be slapped with a basic penalty of P10,000, plus P1,000 per month of continuing violation,” the SEC said.
“The penalty for non-compliance with MC 28 will be set at P20,000, double the current rate of P10,000,” it added.
MC 28 refers to the SEC’s circular issued in 2020 that requires corporations, partnerships, associations, and persons under the jurisdiction and supervision of the SEC to create and/or designate an official e-mail address and cellphone number for transactions with the SEC.
“With the stricter penalties, we hope corporations will be more mindful of submitting their annual reports on time, as these are vital in ensuring the efficient functioning of the Philippine corporate sector,” said Emilio Aquino, SEC chairman.
“Faithful compliance allows the SEC to manage our corporate database better and determine which companies are active or not, in turn allowing us to purge inactive corporations and protect the public from fraudulent entities,” he added.
The SEC said companies still have until September 30 skirt the higher penalty under its amnesty program.
“The amnesty program, issued through SEC Memorandum Circular No. 2, Series of 2023, comes in the form of a reduction of fees which corporations can apply for through their electronic filing and submission tool (eFAST) accounts,” the SEC said.
Non-compliant corporations who avail of the amnesty will pay only P5,000 for their late or non-filed reports, regardless of the number of years they failed to comply.
Suspended or revoked corporations meanwhile will be allowed to pay only half of the actual penalties they incurred, plus a petition to lift order of revocation fee of P3,060.
“Non-compliant domestic stock corporations with retained earnings of not more than P100,000 stand to save at least P25,000 should they avail the amnesty. This is based on the fees for the late filing of GIS and AFS, as well as non-compliance with MC 28, equivalent to P30,000, versus the P5,000 amnesty,” the SEC at the same time said.
