The nation’s securities transaction tax income plunged 31.8 percent year-on-year last month to NT$6.4 billion (US$197 million) and is set to shrink further as Chinese Nationalist Party (KMT) legislators seek to suspend the levy for a year to help invigorate the local bourse.
“Securities transaction tax revenues amounted to NT$6.4 billion last month, down NT$3 billion, or 31.8 percent, from a year ago,” director of the ministry’s statistics department Lin Lee-jen (林麗貞) told a press briefing yesterday.
State coffers took in NT$77.5 billion in securities revenues in the first nine months, declining NT$19.8 billion, or 20.4 percent, compared with the same period last year, Lin said.
The figures translated into 63.7 percent of the target amount for this year as the ministry had expected the levy to contribute NT$121.7 billion to the national treasury, the ministry’s report showed.
Securities transactions averaged NT$98.8 billion a day last month, the lowest since October 2006, Lin said, adding that the ministry had to lower the daily estimate to NT$100 billion from NT$160 billion when drawing up the budget.
The numbers are expected to dive further as the Cabinet has proposed halving the levy from the current 0.6 percent to 0.3 percent for six months to galvanize the equity market.
The legislature, where KMT lawmakers control a solid majority, is slated to review the measure today, along with the KMT caucus’ version that would allow the authorities to suspend the tax for a year, if necessary.
KMT Legislator Lu Shiow-yan (盧秀燕), sponsor of the bill, said the tax cut plan would not be strong enough to boost the market, which has shed more than 40 percent this year.
“The Cabinet is likely to request an extension of the tax cut after the measure expires, given the severity of the credit crisis across the world,” Lu, convener of the Finance Committee, said by telephone. “I believe a more flexible measure is necessary to help restore investor confidence.”
Lu said many KMT colleagues share her views and would give their endorsements when the legislature settles the fate of the bills later this month.
Opposition Democratic Progressive Party (DPP) lawmaker Yu Jan-daw (余政道) disagreed, saying the tax cut would hurt state coffers while having little impact on the global financial market turmoil.
Yu said he would advise the DPP caucus to demand a four-month freeze on the measure, allowing lawmakers more time to discuss the bills. The securities transaction levy accounted for nearly 10 percent of the central government’s tax revenues in the first nine months.
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