Thu, May 04, 2017 - Page 12 News List

Day trading cut meets objective, FSC says

By Ted Chen  /  Staff reporter

Financial Supervisory Commission Chairman Lee Ruey-tsang answers reporters’ questions at the legislature’s Finance Committee yesterday.

Photo: Wang Meng-lun, Taipei Times

A day trading tax cut that came into effect on the final trading session of last month has met its objective of reviving the anemic turnover of the local bourse in just two trading sessions, the Financial Supervisory Commission (FSC) said yesterday.

The tax was cut from 0.003 percent to 0.0015 percent on Friday last week, leading to a 14.49 percent rise in average daily turnover to NT$133.78 billion (US$4.45 billion) as of the end of Tuesday, up from NT$116.84 billion in the middle of last month, Securities and Futures Bureau Deputy Director-General Wang Yung-hsin (王詠心) told the legislature’s Finance Committee.

The amount of day trading transactions in relation to overall trading on the Taiwan Stock Exchange (TWSE) rose from 11.91 percent to 15.4 percent following the implementation of the cut, Wang said, adding that the Taipei Exchange (TPEX) saw day trading rise from 18.32 percent to 23.81 percent over the same period.

The outcome exceeds respective targets to have day trading account for at least 15 percent and 22.5 percent of overall turnover on the TWSE and TPEX respectively, goals set by the commission to make the tax cut viable without eroding government revenue.

FSC Chairman Lee Ruey-tsang (李瑞倉) attributed the gains to increased activity among local investors and said that he found the outcome satisfactory.

The Legislative Yuan passed a bill in late March to cut the transaction tax for day trading for one year.

Lee said that the commission would continue to monitor the tax cut, which could be reversed after one year, depending on whether the measure consistently meets its objectives.

Meanwhile, lawmakers raised concerns about the prospects of locally developed T-Wallet mobile payment services following the arrival of dominant rivals such as Apple Pay and Samsung Pay in Taiwan, with Android Pay due to launch next month.

In the nine days since the launch of Apple Pay in Taiwan, consumers have digitized nearly 700,000 credit cards onto their iPhones, while T-Wallet, introduced by Taiwan Mobile Payment Co (台灣行動支付), has garnered only about 30,000 users since its launch seven months ago, commission data showed.

New Power Party (NPP) Executive Chairman Huang Kuo-chang (黃國昌) said that T-Wallet had been given poor reviews, with users lodging complaints about inconveniences such as the need to enter a password on each purchase, slow connection speeds and a general lack of merchants accepting the service due to low brand recognition and little marketing effort.

Huang said the government’s penchant for political appointments in leadership positions at financial sector peripheral governing bodies has led to revolving-door policies that hamper innovation.

Chao Yang-ching (趙揚清), chairperson of Financial Information Service Co (財金資訊), a government-run firm overseeing T-Wallet’s development, said that the home-grown service has advantages over Apple Pay.

T-Wallet does not require issuer banks to commit to high marketing budgets and usership targets, while it accepts debit cards, whereas Apple Pay is only available for credit-card holders, Chao said.

Chao said that T-Wallet is compatible with Android devices, which account for 80 percent of smartphones in Taiwan, compared with the 20 percent market share of Apple Inc’s iPhones.

However, the difficulty of supporting software compatible with various Android smartphones has resulted in the poor performance of the T-Wallet app, she said.

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