The Executive Yuan has proposed a bill to cut the transaction tax on day trading by half in a bid to boost turnover on the local equity market, Minister of Finance Sheu Yu-jer (許虞哲) said yesterday.
Premier Lin Chuan (林全) has approved a plan submitted by the Ministry of Finance to cut the transaction tax on day trading to 0.0015 percent from 0.003 percent at a time when turnover in the local bourse has been declining, with many major market players who trade at least NT$500 million (US$15.5 million) of equities in a quarter having been away from the trading floor, Sheu said.
Day trading allows traders to buy and then sell, or vice versa, in a single session. Since June 2014, the Financial Supervisory Commission has expanded the range of day trading at an accelerated pace.
Photo: Peter Lo, Taipei Times
The proposed cut needs to be approved by the legislature before it can be written into law. Since the most recent legislative session ended yesterday, if the Cabinet wants the new bill to become effective ahead of the Lunar New Year holiday, lawmakers would have to convene a special session.
Sheu said the ministry is planning to insert a motion into the bill that would stipulate that the transaction tax cut would be scrapped after one year if turnover fails to increase.
Boosted by the news of the planned cut, local equities staged a strong rebound yesterday, sending the TAIEX up 1.1 percent to close at 9,253.5 points.
That indicated that the market has high hopes that the new measure would encourage investors to return, energizing equity trading on the local bourse.
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