The discussion of an electricity price freeze should be higher on President Ma Ying-jeou’s (馬英九) priority list than the implementation of a securities capital gains tax, the Democratic Progressive Party (DPP) caucus said yesterday.
“The increase in electricity prices will affect everyone and every sector, with a huge negative impact on the national economy. That is why we think the government should first discuss a price freeze,” DPP whip Ker Chien-ming (柯建銘) told a press conference.
“Policies should be implemented in order of priority. The DPP says that the price issue should be considered before the securities capital gains tax,” he said.
Ker described Ma as “Taiwan’s most dangerous political terrorist” for the way the president had created what Ker called public chaos and fear with his ill-judged policies, including the gasoline price rise announced on April 1 and the impending electricity price increase on May 15.
The Executive Yuan on Wednesday finalized its version of a capital gains tax on securities transactions, under which individual investors who earn a net NT$4 million (US$136,050) or more annually from trading shares, initial public offerings and beneficiary certificates of private equity funds would be taxed at rates of between 15 percent and 20 percent.
Ker yesterday said that the DPP was not trying to evade the issue, because it has always supported the capital gains tax and has prepared its own version of a securities tax proposal. However, he added, the DPP did not like the way Minister of Finance Christina Liu (劉憶如) and the Executive Yuan had rushed to finalize the controversial tax system.
The government’s fumble on the issue had devastated the stock market, Ker said.
Liu had said the people expected to pay the securities tax had in effect “hit the jackpot” because the tax would affect only 1 percent of individual investors. Such comments were “classic” and “cruel,” Ker said.
DPP legislator Wu Ping-jui (吳秉叡) said the Executive Yuan’s version of the tax is flawed as it does not tax Qualified Foreign Institutional Investors (QFII), and the NT$4 million threshold could easily be evaded with dummy accounts.
“In other words, this policy would be a pseudo-reform,” Wu said.
There have also been some differences of opinion within the Chinese Nationalist Party (KMT) on the proposed tax, DPP Legislator Hsu Chih-chieh (許智傑) said, noting that Legislative Speaker Wang Jin-pyng (王金平) and Vice President Vincent Siew (蕭萬長) had both expressed their reservations.