AUO head warns of prolonged stock tax row
The China Post news staffK. Y. Lee, chairman of leading flat panel maker AU Optronics, yesterday cautioned against the imbroglio over the proposed tax on gains made on the stock market, saying it can't go on forever.
June 14, 2012, 11:11 am TWN
Lee made the remarks during the company's shareholder meeting in Taichung.
“The controversy has produced a negative impact on Taiwan's capital market and halved the share prices of many stocks,” he said. “Separately, the cost of raising capital will become higher, forcing companies to refrain from fundraising.”
“The government should not just train all its focus on the tax itself but have a larger vision on Taiwan's economic development,” he said.
He urged the government to simplify the taxation process. Specifically, he criticized the current bill that calls for taxation when the TAIEX rises above 8,500. If the system is put in place, 8,500 will become a hurdle that cannot be surpassed, he said.
Meanwhile, he said AU Optronics does not have any timetables for resuming its 8.5-generation plant construction in China.
The company was approved to construct a 7.5-generation fab in China, under a government restriction that Taiwan flat panel plants in China be at least one generation below those manufactured in Taiwan. However the restriction was scrapped in 2011, paving way for AU Optronics to invest in Chinese panel maker Longfei Optoelectronics and build an 8.5-generaiton production line there.
But, with China's panel oversupply, construction has been put on hold, and equipment has yet to be moved into the facility.
Lee also said that last year was a difficult one for AU Optronics, which posted a loss of NT$61.3 billion in 2011.
He apologized for the mishap, adding the market situation has already improved.