Party whips from the DPP, the People First Party (PFP) and the Taiwan Solidarity Union (TSU) told a press conference that while they supported such a tax, the time was not right and the content of the bill would hurt economic development.
“We call for the KMT to withdraw the proposal for three reasons — the legislation process has been chaotic, the content of the proposed bill fails to address fairness and the time is not right to introduce the tax, when the local economy is slow,” DPP whip Ker Chien-ming (柯建銘) said.
Under the “dual-track, two-stage” proposal supported by the KMT, next year and in 2014, investors would pay a capital gains tax of between 0.02 and 0.06 percent on stock trades only when the TAIEX hits 8,500 points or higher.
Investors who sell more than 10,000 shares from initial public offerings or more than 100,000 shares in emerging stocks or unlisted companies would have to pay a 15 percent tax on capital gains, but they would get a 50 percent tax discount if they held on to their shares for more than a year.
Starting in 2015, all investors would have to pay a 15 percent tax on their capital gains, while investors who sold shares worth NT$1 billion (US$33.3 million) in one year would face a 15 percent tax.
The legislation process has been “nightmarish,” Ker said, as the original proposal, made by the Executive Yuan and endorsed by the president, was rejected by the KMT caucus, which submitted different versions of the bill.
The proposal has neither addressed the principle of the ability to pay nor the principle of equity, he said, adding that it would bring great harm to capital markets in Taiwan with the inclusion of IPOs, unlisted companies and emerging stocks.
The president’s insistence on passing the legislation is suspicious, Ker said, adding that the eighth round of cross-strait negotiations would be held next month and that President Ma Ying-jeou’s (馬英九) administration may be trying to bring in more Chinese investment.
PFP caucus whip Thomas Lee (李桐豪) accused the KMT caucus of doing nothing to coordinate party negotiations on the five proposals on the table, saying that the party could try to pass the bill by a vote with its majority advantage.
About 30 percent of the between NT$6 billion and NT$6.6 billion that the new tax is expected to bring in would come from unlisted companies, Lee said.
"That would basically discourage emerging local companies with aspirations to list on the TAIEX,” Lee said.
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