President Ma Ying-jeou (馬英九) yesterday said the Chinese Nationalist Party (KMT) supports the proposed capital gains tax and will go all-out to push the policy, affirming the government’s determination to implement the tax.
Ma’s comments came one day after KMT legislators refused to place the Executive Yuan’s version of the capital gains tax proposal on the legislative agenda.
“The KMT will solemnly devote itself to pushing the policy. The public should not doubt our determination to promote tax reform,” Ma said at the KMT’s Central Standing Committee meeting in his capacity as party chairman.
The committee also invited Minister of Finance Christina Liu (劉憶如) to present a report on the implementation and effect of the capital gains tax. The ministry has proposed raising the amount to be exempt from tax from NT$3 million (US$102,000) to NT$4 million.
Ma said the securities tax would not have a great impact on the performance of the stock market or individual investors, but he did acknowledge a lack of communication with party legislators on the issue.
“Our discussion of the tax policy in today’s committee meeting shows our determination to promote the policy, and the government is promoting the policy as part of our push for social justice,” he said.
Tuesday’s rebellion raised questions about Ma’s leadership within the party. Ma met with Legislative Speaker Wang Jin-pyng (王金平) and Premier Sean Chen (陳冲) later on Tuesday and told the KMT caucus to support the Cabinet’s version in tomorrow’s plenary meeting.
Liu told the committee that her ministry would strengthen communications with lawmakers.
Meanwhile, KMT caucus whip Lin Hung-chih (林鴻池) and legislators Wu Yu-sheng (吳育昇) and Hsu Yao-chang (徐耀昌) held a press conference earlier in the day to dismiss media reports that Tuesday’s actions had political overtones.
“We did not stage an uprising against [Ma] nor did we throw out the Executive Yuan’s amendments, as media reports claimed. Instead, we gave a lot of thought to how we can help the Executive Yuan push through the proposal,” Wu said.
Wu said that delaying review of the tax proposal could avoid complications in the KMT caucus, where members remain divided on several other issues, including whether to allow imports of US beef containing residue of the livestock feed additive ractopamine, and fuel and electricity price increases.
In light of the limited time left in the current legislative session, the securities income tax proposal was not supposed to clear the legislature floor before the session ends, possibly in the middle of next month, which was why the KMT made the suggestion on Tuesday, Lin said.
Now that the move had caused concerns about the government’s commitment to tax reform, “we will not block the amendments at Friday’s session,” Lin said.
In related news, the premier came under pressure from the business community at an event organized by the Council for Industrial and Commercial Development.
Jih Sun Group chairman Edward Chen (陳國和) asked Chen to stop levying the 0.3 percent securities-exchange transaction tax if a capital gains tax is introduced, while Tsai Ming-chang (蔡明璋), a former council executive, said a floating securities-exchange transaction tax rate based on the performance of the national economy should be adopted instead.
The premier defended the government’s plan, saying it was a move toward an ability-to-pay tax that would have a minimal impact on the stock market.