Minister of Finance Su Jain-rong (蘇建榮) on his first day in office yesterday said he would pursue a more equitable taxation system and bolster the nation’s financial health without hurting the economy.
Su briefed reporters on his new role as a partial Cabinet reshuffle took effect.
The minister turned a cold shoulder to tax cuts to encourage fund investment or long-term care savings, but voiced support for lowering taxes on warrant and option transactions.
“A stable economy would be meaningless and elusive if it is not based on a fair taxation system and equitable distributions of wealth,” Su told reporters after the handover ceremony.
Su made the statements after being asked to comment on tax cuts proposed by Financial Supervisory Commission (FSC) Chairman Wellington Koo (顧立雄) on five investment tools.
Koo has thrown his weight behind proposals to lower taxes on option and warrant transactions, as well as savings for fund investments, long-term care and pension insurance.
The Securities Investment Trust and Consulting Association (投信投顧公會) has pressed for such tax cuts, saying that they would help boost sales of options and warrants, exchange-traded funds and insurance policies.
Su said that he agreed about tax cuts on warrants and options for market making and risk-hedging reasons, but had reservations about granting income tax deductions for fund investments or purchases of long-term care and pension insurance policies.
“If the ministry proposes leniency for fund savings, others would call for tax cuts on stock investments as well,” Su said.
Trade groups have urged authorities to offer tax incentives for the establishment of “Taiwan Individual Savings Accounts” (TISA), mimicking Japanese moves to encourage financial planning.
“TISA” would benefit the financial sector, as well as overall tax revenue, as seen in Japan, its advocates have said.
Su is willing to sit down and talk to the FSC on tax revisions that should be looked at from a broad perspective, he said, adding that his predecessor, Sheu Yu-jer (許虞哲), openly withheld support for TISA.
He said the ministry would not consider increasing tax returns, even though the national treasury has collected more taxes than the target for four consecutive years straight.
“Surplus tax revenue should be used to pay government debt to avoid heaping a tax burden on the next generations,” Su said.
The looming US-China trade war and other sources of uncertainty also discourage a loose fiscal, he said.
As for potential consolidation of state-run financial companies, Su said that he would recommend such reforms only if doing so would create synergy gains.
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