Opposition lawmakers yesterday accused the executive branch of a serious failure to communicate with its own ministers following remarks by Minister of Finance Christina Liu (劉憶如) that she would not have proposed a capital gains tax on securities transactions if she had been aware that the government planned to raise fuel prices and electricity rates.
Liu reportedly made the remarks during a conversation with Chinese Nationalist Party (KMT) Legislator Wang Hui-mei (王惠美) on Friday.
However, Liu added that she still thought the levy would help to boost the national coffers and meet the government’s goal of making the taxation system fairer.
Liu cited the example of Hon Hai Group (鴻海集團) chairman Terry Gou (郭台銘), who paid only NT$3.48 million (US$117,500) in securities transaction taxes in 2010 while making NT$1 billion selling local stocks.
Based on the capital gains tax currently proposed, Gou would have had to pay NT$75 million in tax, Liu reportedly said.
Late on Friday, Liu said she was not aware when she spoke to Wang that one of the other individuals present was a reporter.
Liu’s remarks drew questions from Democratic Progressive Party (DPP) lawmakers yesterday on the policymaking process of President Ma Ying-jeou’s (馬英九) administration, with several saying here was an obvious lack of consultation and discussion between senior officials when formulating policy prior to policy announcements.
Ministers clearly hold personal policy-related talks with Ma outside the framework of government, which is a root cause of the frequent chaos seen at the highest levels, DPP legislators said.
DPP Legislator Pan Men-an (潘孟安) blamed the government’s internal inconsistencies on Ma’s one-man policymaking and department heads who make their own unilateral decisions.
“The consultation mechanism in the Executive Yuan and the upper echelons of the government appear to be nothing but an empty shell. Either they never read the news, or they are too foggy-minded, leading to the hasty implementation of major policies,” Pan said
A policymaking model under which everyone only answers to Ma while brushing aside the administrative role of the Executive Yuan is the cause of social unrest in the country, Pan said, calling the Cabinet a “scarecrow Cabinet.”
DPP Legislator Chen Chi-mai (陳其邁) described the Ma administration as a “Hydra-like government” with multiple heads that often disagree over policymaking.
Terry Gou responded to comments on his tax status.
In a statement released on Friday, the Hon Hai group said: “Hon Hai Group and chairman Gou pay taxes according to the law.”
It is improper to use Gou’s case to justify the planned levy of the capital gains tax, the statement added.
Government officials should focus on the matters at hand when they addressed public policies, rather than target specific individuals, it said.
Liu allegedly made the remark in a bid to make the public believe that the proposed capital gains tax was discussed prior to the government’s decisions to raise fuel prices and electricity rates. However, the Cabinet only approved a revised draft of the securities capital gains tax bill on April 26, weeks after its announcements of fuel price increases on April 1 and electricity rate hikes on April 12.
Saying the Executive Yuan always ensures its ministers communicate on major policy issues, Premier Sean Chen (陳冲) yesterday said it could be that Liu was so focused on tackling the capital gain tax issue at the time that she failed to take note of other developments.