The Chinese Nationalist Party (KMT) legislative caucus’ proposed version to tax capital gains on securities transactions prevailed at a coordination meeting last night as it received an endorsement from the Presidential Office.
The negotiation meeting, organized by Presidential Office Secretary-General Tseng Yung-chuan (曾永權), discussed the version proposed by the KMT caucus and concluded that the threshold for corporations to enjoy tax deductions after holding stocks for at least one year would be increased from one year to three years, while no changes are made to regulations regarding individual investors, Presidential Office spokesman Fan Chiang Tai-chi (范姜泰基) said.
The Presidential Office, the Executive Yuan and the legislature would continue to discuss the KMT caucus’ and the Cabinet’s versions, he added.
Photo: Lo Pei-der, Taipei Times
Officials who attended the meeting included Deputy Finance Minister William Tseng (曾銘宗), KMT Secretary-General Lin Join-sane (林中森), Executive Yuan Secretary-General Lin Yi-shih (林益世), Taxation Agency Director-General Sheu Yu-jer (許虞哲), Financial Supervisory Commission Chairperson Chen Yuh-chang (陳裕璋) and KMT legislators.
Premier Sean Chen (陳冲) did not attend the meeting at the Presidential Office last night. He was instead at a dinner banquet with executives of TV news stations.
KMT lawmakers proposed their version on Monday night and rejected the original version approved at a Cabinet meeting on April 26, resulting in the resignation of Minister of Finance Christina Liu (劉憶如).
In an interview with the Chinese-language CommonWealth Magazine on Tuesday after offering her resignation because the KMT caucus’ version “did not meet with [her] beliefs,” Liu said she was most concerned with what she said was the KMT caucus’ proposal to exempt from taxation the main players who make a substantial fortune in the stock market.
Liu said the KMT caucus’ version was against the “ability to pay,” a vital principle of tax fairness.
The KMT caucus’ version would allow individual investors to pay the tax only when the benchmark TAIEX closes above 8,500 points, while the Cabinet’s version that Liu drafted would tax individual investors whose annual securities gains exceed NT$4 million (US$134,500).
Earlier yesterday, some KMT lawmakers voiced their dissatisfaction at Liu over her critiques of their proposal.
KMT Legislator Wu Yu-sheng (吳育昇) said Liu blames President Ma Ying-jeou (馬英九) for failing to forge a consensus among KMT members on the Cabinet’s version.
“Christina Liu complained to me about President Ma on May 17. She said: ‘It was the president who wanted me to do this [impose a capital gains tax on securities trading]. Doesn’t he [Ma] have to come forward to coordinate opinions of everyone?’” Wu said.
KMT Legislator Lai Shyh-bao (賴士葆), the main initiator of the KMT caucus’ version, hit back at Liu, saying the Cabinet’s version failed to reflect fairness and justice.
Meanwhile, at a KMT Central Standing Committee meeting in the afternoon, President Ma Ying-jeou (馬英九), who doubles as party chairman, touted the Ministry of Finance’s efforts in offering a tax calculation service, but he did not discuss the issue of Liu’s resignation or the capital gains tax.
The committee invited the Ministry of Finance to report on the capital gains tax, and with the resignation of Liu, the report was presented by Tseng instead.
Amid disputes over different versions of the capital gains levy, Vice President Wu Den-yih (吳敦義) said the government would finalize a version of the tax proposal that would carry out the government’s goal of tax reform while maintaining the stability in the local stock market.
“We should put the international situation into consideration when presenting the tax plan. No matter what version of the tax plan we present, we’d like to realize social justice in taxation and we also want to keep stock markets stabilized at the same time,” he said.
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