The Chinese Nationalist Party (KMT) caucus yesterday said that the abolition of the capital gains tax is the “direction” the caucus would be taking, adding that an additional note could be added to the amendment to explain that capital gains are already part of the securities transaction tax.
The KMT caucus had backed the proposal in August by Deputy Legislative Speaker Hung Hsiu-chu (洪秀柱) when she was still the party’s presidential candidate. Hung’s version was to divide the 0.3 percent securities transaction tax into two parts: a 0.25 percent securities transaction tax and a 0.05 percent capital gains tax.
KMT caucus whip Lai Shyh-bao (賴士葆) said after the KMT caucus meeting yesterday morning that the abolition of the capital gains tax would be the caucus’ “main direction,” but it would also suggest including an explanation that capital gains are part of the securities transaction tax.
Photo: Liao Chen-huei, Taipei Times
“So [despite the ‘abolition’] the proposal is not a return to the previous starting point” where no capital gains tax is levied at all, Lai said.
What would be added are the figures of 0.25 percent and 0.05 percent, while the securities transaction tax is to remain at 0.3 percent, Lai said.
KMT Legislator Lo Ming-tsai (羅明才) said the direction of “the abolition of capital gains tax” had the support of the majority of lawmakers at the meeting, who considered it vital to alleviate taxes.
Photo: CNA
Democratic Progressive Party caucus whip Ker Chien-ming (柯建銘) said the KMT should have a final and integrated version ready, as party heavyweights, including President Ma Ying-jeou (馬英九), KMT Chairman Eric Chu (朱立倫) and Hung, have differing views on the matter.
The proposal was not processed yesterday, but would go through another round of cross-caucus negotiation on Monday presided over by Legislative Speaker Wang Jin-pyng (王金平).
A proposal to abolish the capital gains tax on securities was condemned yesterday by Green Party-Social Democratic Party (SDP) Alliance legislative candidates.
“The current tax system is extremely unfair because there is a lot of tax levied on personal income, but no tax on ‘money earned from money’ through financial maneuvering,” SDP Chairperson Fan Yun (范雲) said.
“If the government says that the fall in the stock market is due to the capital gains tax, in reality it is just looking for an excuse for their own ‘bungling,’” SDP legislative candidate Miao Po-ya (苗博雅) said, adding that the recent drop should be attributed to the sluggishness of the economy as a whole, along with close economic ties with China.
“There is no crisis in the stock market yet. We should focus on the long-term healthy development of capital markets,” Miao said, adding that tax cuts would be useless unless broader reforms are adopted.
A capital gains tax on securities could promote healthy capital markets by discouraging speculation, with preferential rates offered for long-term securities, Miao said.
Additional reporting by Abraham Gerber
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