Thu, May 16, 2013 - Page 13 News List

Revision to capital gains tax proposed

THRESHOLD DROPPED:Under the new proposal, the TAIEX reaching the 8,500 point mark would no longer trigger imposition of the tax on individual investors

By Amy Su  /  Staff reporter

The government plans to revise the capital gains tax on securities investments during this legislative session, to drop the 8,500-point imposition threshold for most individual investors, a special task force said after a meeting yesterday.

The task force said the revision would boost the local bourse and it had reached consensus with the Ministry of Finance and the Financial Supervisory Commission on the move.

DUAL-TRACK SCHEME

The legislature passed a bill introducing the tax last year under a “dual-track, two-stage” system, with most investors required to pay a tax of between 0.02 percent and 0.06 percent on stock trades if the TAIEX reached 8,500 or higher this year and next year.

However, that threshold drew concern from the public, with many analysts believing it was one of the factors impeding trading momentum on the local bourse, which prompted the 19-member task force — led by Chinese Nationalist Party (KMT) Legislator Alex Fai (費鴻泰) — to urge the threshold be dropped.

However, starting from 2015, individual investors who sell shares worth NT$1 billion (US$33.3 million) in one calendar year will be subject to either a 15 percent tax on their capital gains, or a 0.1 percent tax rate on their stock trades that exceed NT$1 billion, the task force said.

‘SIMPLIFIED AND LIGHT’

“The new version meets the spirit of a simplified and light taxation system,” Fai told a press conference after the meeting.

Those were the only two changes made to the capital gains tax on securities transactions passed by the legislature last year.

Fai said the new proposal would be submitted to the KMT caucus today for discussion.

The legislature’s Finance Committee is expected to review it on Monday at the earliest, he said.

“We hope the revised version can be passed by the legislature during this session and the implementation backdated to January 1,” he added.

HICCUP?

However, questions were raised about the revision’s passage after KMT Legislator Lu Shiow-yen’s (盧秀燕) announced yesterday that she was withdrawing from the task force. Her announcement indicates that tensions over the capital gains tax on securities transactions exist within the KMT caucus, .

Lu said she would not participate in a meeting yesterday evening of the legislature’s task force reviewing the tax, saying the review process was only aimed at benefiting certain people or groups.

The task force denied Lu’s claims, saying the discussion process was open and transparent.

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