The recent turmoil raised by the government’s draft bill for a capital gains tax on securities transactions has proven one thing: It all hinges on Minister of Finance Christina Liu (劉憶如).
However, regardless of the bill’s success or failure, it could be almost assured that Liu’s impulsive personality would only guarantee more headwinds for the government’s future taxation and finance reforms over the next four years.
Last week, Liu said the thought that “the tax proposal would not be passed by the legislature” had got on her nerves in the previous few days, exemplified by her unusual absence from the weekly Executive Yuan meeting on Thursday, when the Cabinet resigned en masse ahead of the May 20 presidential inauguration.
Liu remained incommunicado throughout the next day until she called a group of reporters waiting in the Ministry of Finance on Friday night, after the legislature passed the first reading on amendments to impose a capital gains tax on securities transactions.
“I need to leave for a while and think alone,” Liu told reporters by telephone. “Did nobody else see the rush [for passage of the proposal]?”
Liu said that waiting for the proposal to pass its first reading was like expecting the announcement of examination results, adding that she finally felt relief when the results came out.
Other than concerns about how substantial the Cabinet’s version of the tax proposal might be, Liu said the timeliness for the bill’s passage was the major worry.
In Liu’s opinion, timeliness is the most important element of the proposal, as uncertainties created in the stock market by the tax proposal would only fade after the legislature passes it.
Although few express optimism that the proposal can be passed in the current legislative session — which is scheduled to end by the end of this month — even if it has passed the first reading, Friday’s procedural progress at least indicated some possibility that it would be passed, Liu said.
Compared with the attention and insistence on the timing, Liu said she was open-minded on lawmakers’ different views toward the proposal.
“All concerns [about the proposal] can be raised and discussed in the legislature’s Finance Committee,” Liu said. “I would also be happy to explain everything to lawmakers, if necessary.”
Despite Liu’s strong passion for taxation and finance reforms, the draft bill may not clear the legislative floor any time soon. One of the major obstacles it faces is that too many concerns remain, which could be seen in the fact there are nine versions of the proposal already waiting to be discussed in the Finance Committee, with the Democratic Progressive Party caucus set to announce its own version this week.
Liu’s personality may be the other major issue slowing progess, with many Chinese Nationalist Party (KMT) legislators complaining that Liu was too self-reliant and emotional, and accusing her of lacking communication skills.
Speculation last week suggested that Liu had told Premier Sean Chen (陳冲) and President Ma Ying-jeou (馬英九) that she wanted to resign, but Ma had asked her to stay. Several KMT lawmakers, including Lu Chia-chen (盧嘉辰), Lo Shu-lei (羅淑蕾) and Ting Shou-chung (丁守中), said Liu never or rarely ever communicated with them during the entire process of introducing the proposal, making them feel disrespected.