Government officials yesterday dismissed a report that it may reinstate the levy on stock trade earnings, saying the matter was still being studied and no decision would be made without a public consensus.
The Chinese-language Economic Daily carried a front-page story saying that the government was working toward taxing corporate stock transaction incomes.
The news caused the TAIEX to tumble yesterday morning, with the index shedding more than 100 points.
The drop tapered off and recovered to a small gain after Premier Wu Den-yih (吳敦義) said he had yet to receive the Ministry of Finance’s tax reform proposal.
Wu declined to say whether he favored the levy or not, but said the government would be very cautious in considering the option.
The government taxed stock transactions gains in 1989 but scrapped the levy soon later after the TAIEX plunged 19 consecutive days from 8,000 points to 4,763, losing more than 40 percent.
The finance ministry issued a statement later yesterday saying capital gains tax was just one of several options the Cabinet’s Tax Reform Committee was scheduled to discuss later this month.
The committee would not come to any conclusions without first seeking public support, the statement said.
“The matter will have to go through discussion in the committee, the ministry and the Cabinet before heading to the legislature,” it said.
“All tax reform proposals will have complementary measures as well as the backing of the public,” it said.
Chinese Nationalist Party (KMT) Legislator Lai Shyh-bao (賴士葆) said chances were slim that a proposal to bring back the capital gains tax would clear the legislature given its unpopularity.
KMT Legislator Lo Ming-tsai (羅明才) urged the finance ministry to think twice before proposing to reinstate the levy.
The tax could hit the economy just when it is showing signs of recovery, Lo said.
The local bourse dipped 3.28 points, or 0.04 percent, to close at 7,596.6 yesterday on turnover of NT$129.48 billion (US$4.01 billion), Taiwan Stock Exchange data showed.
Eric Lai (賴建承), an analyst at Marbo Securities Consultant Co (萬寶證券投顧), said the capital gains tax had proven a poison each time the government has broached the subject.
No investors would support it, he said by telephone.
“The government had better drop the matter in case these discussions disrupt the economic recovery,” Eric Lai said.
The state coffers could suffer even if the government decides it is fairer to tax trade earnings and abolish the securities transactions tax.
The latter tax offers more stable revenues than the former because there is no guarantee that all transactions are profitable, Eric Lai said.
“Investors would demand compensation for losses if they had to pay taxes on their trade earnings,” the analyst said.
Steel and iron stocks saw the biggest decline yesterday at 1.5 percent, followed by airline and shipping stocks and financial shares, which fell 1.33 percent and 0.9 percent respectively.
Meanwhile, flat panel and electronics stocks advanced 2.34 percent and 1.02 percent each.
Losers outnumbered gainers, with 1,477 stocks going down in value and 1,096 going up.
Foreign institutional investors sold a net NT$3.282 billion in local shares, the exchange data showed.
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”
Sales in the retail, and food and beverage sectors last month continued to rise, increasing 0.7 percent and 13.6 percent respectively from a year earlier, setting record highs for the month of March, the Ministry of Economic Affairs said yesterday. Sales in the wholesale sector also grew last month by 4.6 annually, mainly due to the business opportunities for emerging applications related to artificial intelligence (AI) and high-performance computing technologies, the ministry said in a report. The ministry forecast that retail, and food and beverage sales this month would retain their growth momentum as the former would benefit from Tomb Sweeping Day
Thousands of parents in Singapore are furious after a Cordlife Group Ltd (康盛人生集團), a major operator of cord blood banks in Asia, irreparably damaged their children’s samples through improper handling, with some now pursuing legal action. The ongoing case, one of the worst to hit the largely untested industry, has renewed concerns over companies marketing themselves to anxious parents with mostly unproven assurances. This has implications across the region, given Cordlife’s operations in Hong Kong, Macau, Indonesia, the Philippines and India. The parents paid for years to have their infants’ cord blood stored, with the understanding that the stem cells they contained