The Executive Yuan late last night devised a new version of a capital gains tax plan after Premier Sean Chen (陳冲) called a meeting in which Chinese Nationalist Party (KMT) lawmakers and Cabinet officials revised the KMT caucus’ proposal, which has come under severe criticism as being unfair.
Under the Cabinet’s previous version, individual investors who earn a net NT$4 million (US$134,093) or more annually from trading shares, initial public offerings and beneficiary certificates of private equity funds would be taxed at a rate of between 15 percent and 20 percent.
Meanwhile, the KMT caucus’ version drafted on Monday proposed a “dual-track mechanism,” under which individual investors have a choice of: one, having their capital gains from stock investments taxed based on the TAIEX level, that is, if the weighted index is higher than 8,500 points, gains will be taxed at a rate of between 0.02 percent and 0.06 percent; or two, having their capital gains included in the calculation of their annual income, at a rate of between 5 percent and 40 percent.
Photo: CNA
It allowed individual investors to choose their favored tax payment method at the beginning of each year and investors cannot change their decision within that year.
Civic groups have criticized the KMT proposal, saying it would not promote a fairer taxation system. They said that over the past 10 years, there were only 18 months in which the benchmark index stood above 8,500 points.
The TAIEX closed at 7,301.5 yesterday.
Three major revisions were made at last night’s meeting to the KMT caucus’ version.
First, the tax payment method based on the index level would be eradicated in 2017.
Second, rich people would not be allowed to use the index-based tax payment method.
Rich people are defined as shareholders who own more than 3 percent of the shares of a company, people whose annual income excluding income earned from shares transactions exceeds NT$5 million, and people who live in the country less than 183 days a year.
And third, starting in 2017, only four categories of individual investors need to pay a securities capital gains tax: people who hold more than 1 percent of the shares of a company, people whose annual income excluding income derived from securities transactions exceeds NT$3 million, people who sell shares annually valued at more than NT$1 billion, and people who live in the country less than 183 days a year.
The latest proposal will formally become the government’s version, replacing the Cabinet’s previous proposal if it is approved at the KMT caucus meeting today.
Earlier yesterday, the Executive Yuan named a former veteran tax official, Chang Sheng-ford (張盛和), the new finance minister to fill the position left by Christina Liu (劉憶如), whose offer to resign on Tuesday had been accepted by Chen and President Ma Ying-jeou (馬英九). Liu resigned following disagreements over the KMT caucus’ version of the proposed tax and harsh criticism of the Cabinet’s version from some KMT lawmakers.
Chen’s nomination of Chang, who retired as deputy minister of finance in February after serving at the ministry for more than 30 years, was approved by Ma last night.
Chen said he nominated Chang because of his breadth of practical experience in tax administration and knowledge of tax principles.
Chang’s appointment drew mixed reactions from lawmakers.
KMT caucus whip Lin Hung-chih (林鴻池) said the caucus respected the decision and expected Chang to communicate with lawmakers fully.
People First Party caucus whip Thomas Lee (李桐豪) said he expected “nothing much” from Chang because of his background as a technocrat.
DPP caucus whip Ker Chien-ming (柯建銘) voiced doubts about Chang’s ability to deal with the issue and other tax reform issues down the road, citing concern about his background as a bureaucrat. Ker added that Chang might lack the vision and courage to push reforms.
Taiwan Solidarity Union Legislator Hsu Chung-hsin (許忠信) said he had no opinion about the appointment of Chang, but added that the government should fully review the capital gains tax plan.
DAREDEVIL: Honnold said it had always been a dream of his to climb Taipei 101, while a Netflix producer said the skyscraper was ‘a real icon of this country’ US climber Alex Honnold yesterday took on Taiwan’s tallest building, becoming the first person to scale Taipei 101 without a rope, harness or safety net. Hundreds of spectators gathered at the base of the 101-story skyscraper to watch Honnold, 40, embark on his daredevil feat, which was also broadcast live on Netflix. Dressed in a red T-shirt and yellow custom-made climbing shoes, Honnold swiftly moved up the southeast face of the glass and steel building. At one point, he stepped onto a platform midway up to wave down at fans and onlookers who were taking photos. People watching from inside
A Vietnamese migrant worker yesterday won NT$12 million (US$379,627) on a Lunar New Year scratch card in Kaohsiung as part of Taiwan Lottery Co’s (台灣彩券) “NT$12 Million Grand Fortune” (1200萬大吉利) game. The man was the first top-prize winner of the new game launched on Jan. 6 to mark the Lunar New Year. Three Vietnamese migrant workers visited a Taiwan Lottery shop on Xinyue Street in Kaohsiung’s Gangshan District (崗山), a store representative said. The player bought multiple tickets and, after winning nothing, held the final lottery ticket in one hand and rubbed the store’s statue of the Maitreya Buddha’s belly with the other,
‘NATO-PLUS’: ‘Our strategic partners in the Indo-Pacific are facing increasing aggression by the Chinese Communist Party,’ US Representative Rob Wittman said The US House of Representatives on Monday released its version of the Consolidated Appropriations Act, which includes US$1.15 billion to support security cooperation with Taiwan. The omnibus act, covering US$1.2 trillion of spending, allocates US$1 billion for the Taiwan Security Cooperation Initiative, as well as US$150 million for the replacement of defense articles and reimbursement of defense services provided to Taiwan. The fund allocations were based on the US National Defense Authorization Act for fiscal 2026 that was passed by the US Congress last month and authorized up to US$1 billion to the US Defense Security Cooperation Agency in support of the
‘COMMITTED TO DETERRENCE’: Washington would stand by its allies, but it can only help as much as countries help themselves, Raymond Greene said The US is committed to deterrence in the first island chain, but it should not bear the burden alone, as “freedom is not free,” American Institute in Taiwan Director Raymond Greene said in a speech at the Institute for National Defense and Security Research’s “Strengthening Resilience: Defense as the Engine of Development” seminar in Taipei yesterday. In the speech, titled “Investing Together and a Secure and Prosperous Future,” Greene highlighted the contributions of US President Donald Trump’s administration to Taiwan’s defense efforts, including the establishment of supply chains for drones and autonomous systems, offers of security assistance and the expansion of
RSS