Financial authorities yesterday voiced different opinions over capital gains taxes on stock investments, as lawmakers plan to scrap the levy before it takes place next month.
Financial Supervisory Commission Chairman William Tseng (曾銘宗) threw support behind plans by lawmakers to raise taxable hurdles for active traders, saying it is better to spare them from the levy altogether.
Starting next year, individual investors who sell NT$1 billion in shares a year are subject to either a 15 percent tax on their capital gains or a 0.1 percent tax rate on their stock trades in excess of NT$1 billion.
The clause is part of the capital gains taxes and is widely blamed for the local bourse’s sluggish trading last month and in October.
“It makes no sense to impose an extra levy on active traders, as shoppers usually get more discounts when they buy more,” Tseng told the legislature’s Finance Committee.
Tseng attributed revived stock trading this month to market expectations that the legislature would soon make capital gains taxes friendlier to traders.
Lawmakers plan to elevate the taxable threshold to NT$5 billion on Wednesday next week and might ditch the clause, if the Ministry of Finance does not object.
However, Minister of Finance Chang Sheng-ford (張盛和) said it is important to keep the threshold, although he agreed there is room for adjustment given the introduction of daily trading.
“The practice of daily trading indeed makes it easier to meet the taxable hurdles … but that doesn’t merit scrapping the clause, which is a small, but important step to make the nation’s wealth more equitably distributed,” Chang told lawmakers.
The commission introduced daily trading this year in two phases to enlarge stock turnover.
A daily volume of NT$80 billion or more is necessary for domestic securities brokers to turn profits, Tseng said.
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