The legislature’s failure to pass an amendment to the capital gains tax on securities investments is likely to negatively affect the local bourse, academics said on Saturday.
The market was expecting that the revision to the Income Tax Act (所得稅法) proposed by the Chinese Nationalist Party (KMT) would be passed on Friday before the legislature went into recess, but lawmakers let investors down, said Liang Kuo-yuan (梁國源), president of the Yuanta-Polaris Research Institute (元大寶華綜合經濟研究院), one of the nation’s leading think tanks.
On May 20, the bill passed its first reading. However, despite the KMT pushing for the bill’s passage in a bid to boost turnover on the local bourse, the legislature was unable to finish processing the proposal because opposition parties still had reservations about it.
On Friday, the TAIEX closed up 0.13 percent at 8,254.80 points after retreating from the day’s high of 8,334.44 amid anxiety over the bill.
The bill aims to scrap the 8,500-point threshold that automatically triggers the imposition of the tax on most individual investors. Instead, it proposed to give investors who trade more than NT$1 billion (US$33.4 million) in shares within one calendar year the choice of paying a 15 percent tax on their capital gains or a 0.1 percent transactions tax on trades above the first NT$1 billion in transactions made in that year.
The revision also aimed to exempt retail investors from the levy and lower the tax burden on major market players.
Liang said the revision would be a positive move for the local bourse, in particular at a time when the already-slow economic rebound is showing signs of slowing down.
The government recently cut its growth forecast for the economy this year to 2.4 percent from 3.59 percent.
Liang said the passage of the capital gains tax bill was expected to boost investor confidence, leading to more private investment, which in turn would help stimulate the economy.
Norman Yin (殷乃平), an economist at National Chengchi University, also said that the failure to pass the amendment could cast a long shadow over the local bourse.
He urged lawmakers to let tax experts decide on the issue instead of using it as political leverage.
Lawmakers plan to hold a special session between June 13 and June 27 to review the bills that were scheduled to be processed in the last session, which include the capital gains tax revision, a pension reform bill and a media anti-monopoly bill.
Executive Yuan spokeswoman Cheng Li-wun (鄭麗文) said the Cabinet would try its best to communicate with lawmakers to pass these bills during the special session.
WASHINGTON’S INCENTIVES: The CHIPS Act set aside US$39 billion in direct grants to persuade the world’s top semiconductor companies to make chips on US soil The US plans to award more than US$6 billion to Samsung Electronics Co, helping the chipmaker expand beyond a project in Texas it has already announced, people familiar with the matter said. The money from the 2022 CHIPS and Science Act would be one of several major awards that the US Department of Commerce is expected to announce in the coming weeks, including a grant of more than US$5 billion to Samsung’s rival, Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), people familiar with the plans said. The people spoke on condition of anonymity in advance of the official announcements. The federal funding for
HIGH DEMAND: The firm has strong capabilities of providing key components including liquid cooling technology needed for AI servers, chairman Young Liu said Hon Hai Precision Industry Co (鴻海精密) yesterday revised its revenue outlook for this year to “significant” growth from a “neutral” view forecast five months ago, due to strong demand for artificial intelligence (AI) servers from cloud service providers. Hon Hai, a major assembler of iPhones that is also known as Foxconn, expects AI server revenues to soar more than 40 percent annually this year, chairman Young Liu (劉揚偉) told investors. The robust growth would uplift revenue contribution from AI servers to 40 percent of the company’s overall server revenue this year, from 30 percent last year, Liu said. In the three-year period
LONG HAUL: Largan Energy Materials’ TNO-based lithium-ion batteries are expected to charge in five minutes and last about 20 years, far surpassing conventional technology Largan Precision Co (大立光) has formed a joint venture with the Industrial Technology Research Institute (ITRI, 工研院) to produce fast-charging, long-life lithium-ion batteries for electric vehicles, mobile electronics and electric storage units, the camera lens supplier for Apple Inc’s iPhones said yesterday. Largan Energy Materials Co (萬溢能源材料), established in January, is developing high-energy, fast-charging, long-life lithium-ion batteries using titanium niobium oxide (TNO) anodes, it said. TNO-based batteries can be fully charged in five minutes and have a lifespan of 20 years, a major advantage over the two to four hours of charging time needed for conventional graphite-anode-based batteries, Largan said in a
Taiwan is one of the first countries to benefit from the artificial intelligence (AI) boom, but because that is largely down to a single company it also represents a risk, former Google Taiwan managing director Chien Lee-feng (簡立峰) said at an AI forum in Taipei yesterday. Speaking at the forum on how generative AI can generate possibilities for all walks of life, Chien said Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) — currently among the world’s 10 most-valuable companies due to continued optimism about AI — ensures Taiwan is one of the economies to benefit most from AI. “This is because AI is