DPP opposes making stock gains tax bill highest priority
By Ann Yu, The China Post
July 21, 2012, 12:05 am TWN
Democratic Progressive Party (DPP) caucus convener Ker Chien-ming (柯建銘) rebuked calls for the stock gains tax to be the first priority for the upcoming extraordinary legislative session yesterday. Ker said the KMT version does not take into account suggestions from enough perspectives, thus was meaningless to discuss.
KMT caucus whip Lin Hung-Chih (林鴻池) said that their version has considered a wide range of perspectives, and should withstand such accusations. Talk of the stock gains tax has stifled the stock market, bringing its trade volume to lower than NT$50 billion, the second lowest in three and a half years.
Taxing Imposes Fairness to Society: KMT
According to Executive Yuan spokesman Hu Yu-wei (胡幼偉), the Cabinet members and party legislators fully support the caucus version. This version was based on the proposal of KMT Legislator Tsai Cheng-yuan (蔡正元), which imposes a dual-track system on individual investors.
Under the system, investors selling more than 100 units of shares in over-the-counter (OTC) trade, or more than 10 units of initial public offering (IPO) stocks will be subject to a tax of 15 percent on their capital gains. Other investors will be taxed when selling their stocks through an adjusted transaction tax based on the market when the weighted index sits above 8,500 points.
Hu stated the revision was to relieve the tax burden on investors, since the weighted index rarely surpasses 8,500 points. He stated that the stock gains tax has been an issue among government officials for almost 60 years since taxing always triggers complaints. The fundamental rule is to implement fair and reasonable laws to the society.
Ker stated that the proposed version lacks fairness and was useless to discuss. He suggested the priorities should be the government's income allocation issues and cross-strait relations. The KMT's Lin retorted that new tax proposals have never been easy, but they have taken their best efforts to take into account every consideration, and aims to treating investors and taxpayers fairly.
Tax Already Effecting the Market: Business Owners
The stock gains tax dispute has already effected the stock market in recent trading, according to business representatives. The trade volume has dropped below NT$50 billion, the second lowest in three years. Many stockholders have decided to withdraw from the stock markets since they believe that with the global economic crisis and the electricity and oil price hikes, the tax will damage the economy more, according to reports.
Entrepreneurs are also strongly opposed to the enforcement of the new tax. According to the father of Taiwan's chip industry Morris Chang (張忠謀), this was a bad time to impose a tax on the stocks, considering the failing economy. In addition, combining the alternative minimum tax with the stock gains tax is a very foolish thing for the government to do.
Taiwan Securities Association (TSA) Chairman Min-Juh Hwang (黃敏助) also disapproved of the government's decision in imposing the tax. “They did not really inquire about the tax to people from the stock markets. Instead, they only took suggestions from people in the academia area,” he complained.
All parties have reached a consensus to discuss the stock gains tax issue and the beef bill on the July 25, the second day of the four-day extraordinary legislative session.