Minister of Finance Chang Sheng-ford (張盛和) said yesterday he hopes the legislature will pass an amendment for the implementation of a capital gains tax on securities transactions during the extra legislative session next month, to bring to an end the issue and its impact on the stock market.
In terms of the five current versions of the amendment, Chang said the version finalized by the Chinese Nationalist Party (KMT) legislative caucus, which based its proposal on the Cabinet-vetted draft, would be the version with the least impact on the TAIEX.
“The issue of imposing a capital gains tax on securities investments has been having a limited impact on the stock market this month,” Chang, who took office on May 31, told a press conference.
Citing data provided by the Taiwan Stock Exchange, Chang said the benchmark index closed higher on most trading days so far this month, an indication that passing a draft based on the current version as soon as possible is in line with the public’s expectations.
Although the stock market continues to show low turnover, Chang said he believes trading momentum will rebound once the legislature passes a version with the highest consensus and lowest influence on the stock market.
The ministry will continue to communicate with lawmakers as it analyzes the pros and cons of each version, hoping that would make the month long cross-party negotiations in the legislature run more smoothly, Chang said.
“There is no return from the concept [of levying a capital gains tax on securities transactions] since society has paid a lot for the process,” Chang added.
As for other major financial issues, Chang said a ministry-based task force on national taxation and finance would hold several regional meetings over the next two months to discuss three major issues — management of the nation’s debt, local governments’ financial problems and exploring measures to activate state-owned assets.
Following the collection of ideas and suggestions offered by representatives at the meetings, the ministry may propose more amendments and measures for the legislature to review once the new session starts in September, Chang said.
Meanwhile, the ministry is continuing to develop more measures to activate state-owned assets and add to the nation’s finances, he added.
Chang said the nation’s financial condition has been improving gradually, as the issuance of national debt has to decrease year-on-year based on legal regulations.
However, compared with reaching a balance between annual state revenue and expenditure, maintaining the economic balance was a more important goal for the national financial system — which means adopting expansionary fiscal policies in economic downturns, while implementing tightening policies amid upturns — he said.