Wed, May 30, 2012 page1

• Liu offers to resign over tax uproar

  DISAGREEMENTS: The finance minister said she felt she had to leave because she disagreed with a new version of a capital gains tax bill proposed by KMT lawmakers

  • By Shih Hsiu-chuan, Amy Su and Chris Wang / Staff reporters
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  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.

  

  Minister of Finance Christina Liu, center, talks to reporters in Taipei yesterday after offering to resign over her controversial proposal for a capital gains tax on securities transactions.

  Photo: Fang Pin-chao, Taipei Times

  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.

  While Liu tendered her resignation to defend her proposal, President Ma Ying-jeou (馬英九) should offer an explanation on the issue, since Ma was the one who approved the proposal in the first place, DPP Legislator Pan Men-an (潘孟安) said, adding that the feud between the administration and the KMT caucus was a “de facto constitutional crisis.”

  DPP Legislator Kuan Bi-ling (管碧玲) said Liu was hard-nosed in defending her own policy, while colleague Lee Ying-yuan (李應元) said Ma and Chen were the ones to be held accountable for the swirling controversy and instability.

  However, DPP Legislator Hsueh Ling (薛凌) said Liu only had herself to blame in excluding foreign investors from the tax base and the failure to clearly explain the administrative costs and calculation of the proposed capital gains tax, which worsened the situation.

  Taiwan Solidarity Union Legislator Lin Shih-chia (林世嘉) said her caucus would initiate a motion for the resignation of the entire Cabinet today.

  People First Party (PFP) caucus whip Thomas Lee (李桐豪) said his caucus respected Liu’s decision, but maintained the amendments related to the capital gains tax should be withheld until further discussion.

  This story has been updated since it was first published.
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