Thu, Jun 07, 2012 - Page 1 News List

Hon Hai boss proposes taxing the rich

REFORM:Terry Gou said Taiwan’s wealthiest 300 people could contribute another NT$18 billion to the national coffers, more than the proposed capital gains tax would

By Amy Su  /  Staff reporter

Hon Hai Group (鴻海集團) chairman Terry Gou (郭台銘) yesterday proposed that the government impose a tax on the wealthy to make taxes fairer, distribute wealth and improve the nation’s finances, while asking the government to postpone the controversial capital gains tax on securities investments.

Gou said the government should increase taxes for the 300 richest people in Taiwan, adding that his proposal would help the government collect an additional NT$18 billion (US$601.3 million) per year in taxes, more than the NT$15 billion per year expected to be earned by the capital gains tax bill proposed by Chinese Nationalist Party (KMT) legislators.

The 100 wealthiest people — which includes Gou — should be responsible for NT$10 billion in taxes, Gou said, with the second 100 wealthiest people contributing NT$5 billion and the third 100 wealthiest people responsible for NT$3 billion.

Gou said the government should adopt his proposal and halt deliberations on the capital gains tax, which has already had a major social cost.

“The global economic storm we are facing is worse than expected,” Gou told a press conference in Taipei. “At this time, we should stop this pointless bickering [about a capital gains tax] and focus on strengthening the economy.”

Gou said he supported the view that rich people should be taxed more, but added that the government should also focus on using tax money effectively, the costs of tax collection and economic efficiency.

“My idea is definitely in line with these principles,” Gou said.

In response to a comment by KMT Legislator Tseng Chu-wei (曾巨威) on Tuesday that people are “looking for Taiwan’s Warren Buffett, who is willing to be taxed more,” Gou said: “Taiwan does not need a billionaire stock investor like Warren Buffett; it needs more law-abiding businessmen to develop the economy.”

As an example, Gou pointed to smaller companies just completing their initial public offerings, saying that if the government imposes heavy tax pressure on these firms, their operating momentum will disappear, further impacting the nation’s economy.

“What does the government really want ... equal wealth or equal poverty?” Gou asked.

Executive Yuan spokesperson Hu Yu-wei (胡幼偉) said Premier Sean Chen (陳冲) had taken note of Gou’s views and had instructed the Ministry of Finance to take his suggestions into account when the ministry formulates reforms related to personal income tax.

Chen appreciates Gou’s suggestions, Hu said.

The government will thoroughly deliberate on the five drafts of a capital gains tax that passed the legislature’s Finance Committee on Monday in cross-party negotiations, Hu said.

Later, the finance ministry said in a statement that implementation of a capital gains tax on securities investments would improve tax fairness, adding that this is a different concept from Gou’s proposal.

The ministry said it would consider Gou’s suggestions when working out related issues.

Additional reporting by Shih Hsiu-chuan

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