Minister of Finance Christina Liu (劉憶如) offered to resign yesterday after a capital gains tax she enthusiastically proposed was rejected by Chinese Nationalist Party (KMT) lawmakers at a meeting on Monday.
After meeting with Premier Sean Chen (陳冲) yesterday evening, she reiterated her intention to resign, but added that she would wait until the Executive Yuan finds a successor.
At 10:42pm, Executive Yuan spokesperson Hu Yu-wei (胡幼偉) told the press that Chen had not approved Liu’s resignation.
During their brief meeting, Chen told Liu that he wanted her to continue to work on a proposal, merging the Executive Yuan’s version of the capital gains tax on securities transactions and the KMT lawmakers’ version, that would be acceptable to the KMT caucus, Hu said.
Hu quoted Chen as saying that Liu’s resignation was not an issue that needed to be discussed for the moment, adding that Chen put off the question of whether Liu should stay in the Cabinet or leave until after the tax issue is resolved.
Liu said in a statement yesterday afternoon that she had tendered her resignation to Chen due to a disagreement with a new version of the draft bill of a capital gains tax being proposed by KMT lawmakers.
“The [KMT] caucus has been making efforts in integrating a version of the proposal that could be accepted by most people,” Liu said. “However, this version did not meet with my own beliefs.”
The KMT caucus proposal was far from meeting her expectations of the ability-to-pay principle, because major earners in the stock market would not be required to pay a capital gains tax under this version, she said.
However, this did not mean the government has given up on its tax reform efforts, Liu said, adding she still hopes the integrated tax bill will be passed by the legislature as soon as possible so a new system for the securities capital gains tax could be launched.
Her offer of resignation came as a shock to the premier.
According to Hu, Chen learned the news at “about noon” when he was pre-occupied with other events outside the Executive Yuan and that Liu’s resignation letter, in a sealed envelope, had been delivered to Chen’s office at 11am.
At about 3:20pm, Hu told a press conference that Chen wanted to meet with Liu to “thoroughly exchange views about the two proposals.”
Chen did not believe that Liu would need to resign just because her proposed version of the tax bill was not accepted by KMT lawmakers, since “the issue was just part of the ministry’s work,” Hu said.
KMT lawmakers were also shocked by the news.
KMT Legislator Lin Hung-chih (林鴻池) said he was surprised to learn that Liu had offered to resign.
“I didn’t see signs of her opposing the revised proposal,” Lin said.
KMT Legislator Alex Fai (費鴻泰) said he was also shocked because some of the revisions were made based on her views.
“I don’t understand why what was fine with her yesterday wasn’t fine today,” Fai said.
Meanwhile, Democratic Progressive Party (DPP) caucus convener Ker Chien-ming (柯建銘) said: “It’s inevitable for Liu to resign because her policy was rejected by her own party.”
The KMT caucus’ objection to the Executive Yuan’s proposal was like a slap in the face to Liu and the administration, Ker said.
The flip-flopping on policy also reflected a serious lack of communication and integration between the Presidential Office, the Executive Yuan and KMT lawmakers, he said.