Lawmakers to submit a proposal to cut capital gains tax on securities
By John Liu,The China Post
May 3, 2013, 12:06 am TWN
TAIPEI, Taiwan -- Lawmakers will formally submit a proposal this week to stop the capital gains tax on securities collection, and raise the securities transaction tax rate by 0.002 percent instead.
Kuomintang (KMT) legislators Sun Ta-chien (孫大千) helmed the proposal to stop the capital gains tax on Securities collection. Backed by fellow KMT legislator Lo Ming-tsai (羅明才), the proposal was formally signed yesterday..
Wang Chien-shien, the president of the Control Yuan, an advocate of proper taxation, also said recently that while he supported ending the capital gains tax collection, given the current financial situation, the security transaction tax rate should be increased incrementally.
Wang suggested implementing a 0.003 security transaction tax rate when the stock market reaches 4,000 points, and raising the tax rate by 0.001 percent for every 2,000-point increase in the market; that is to exact 0.004 percent when the stock market reaches 6,000 points and above, to exact 0.005 percent when the stock market reaches 8,000 points and above, and to exact 0.006 percent when the stock market reaches 10,000 points and above.
The Ministry of Finance opposed Wang's suggestion, saying it could create "point barriers" in the stock market, and the impact could be greater than the current capital gains tax.
Before Sun presented his proposal, Lo had supported a repeal of the capital gains tax in an effort to rescue the underperforming stock market. However, the government officials insisted that capital gains tax should only be reviewed to seek improvements, but never fully repealed, according to a news source. Lo then about-faced, supporting Sun's proposal version.
Sun said that a proposal was made at the end of last year to repeal the capital gains tax, and to raise the security transaction tax rate to 0.0035 percent; however, the Ministry of Finance found ways to block the review of the proposal, so he had to make a different proposal.
The modification of the capital gains tax must be able to attract capital into Taiwan's stock market, Taiwan Securities Association said, and the repeal of capital gains tax would be the best option/ Still, the association understands it would be difficult to realize.
The Ministry of Finance said setting up the capital gains tax system is not an easy process, and the tax system may be reviewed for improvement, but not repealed hastily.