Opposition lawmakers yesterday called on the Legislative Yuan to postpone reviewing a controversial bill on taxing capital gains on stock investments, saying it is inappropriate to impose such a tax at this time. However, the Chinese Nationalist Party (KMT), which proposed the tax bill, said the party will try hard to push for approval of the bill in the legislature.
The Legislative Yuan has scheduled a special session from Wednesday to Friday to discuss several proposals, including a plan to lift a ban on the leanness-enhancing drug ractopamine in beef and the proposed capital gains tax.
Lawmakers are expected to review the capital gains tax bill on Wednesday.
According to the “dual-track, two-stage” proposal supported by the KMT caucus, next year and in 2014, investors will pay a transaction tax of between 0.02 and 0.06 percent on stock trades only when the TAIEX hits 8,500 points or higher.
Investors who sell more than 10,000 shares from initial public offerings or over 100,000 shares in emerging stocks or unlisted companies will have to pay a 15 percent tax on capital gains, but they will get a 50 percent tax discount if they hold on to their shares for more than a year.
Starting from 2015, all investors will have to pay a 15 percent tax on their capital gains, while investors who sell shares worth NT$1 billion (US$33.3 million) in one year will face a 15 percent tax.
Democratic Progressive Party (DPP) caucus whip Ker Chien-ming (柯建銘) said the KMT’s proposal fails to address fairness and justice in taxation and is also unlikely to accord with the “ability to pay” principle.
Ker said disputes over the capital gains tax have prompted many investors to stay on the sidelines in recent trade, which has seriously affected the performance of the local bourse.
People First Party caucus whip Thomas Lee (李桐豪) said the local economy is slowing down amid weakening global demand, so now is not the right time to impose the tax, which is likely to further impact economic fundamentals.
Lee said if the capital gains tax is levied as planned, the government should abolish the current stock transaction tax.
However, Lin Hung-chih (林鴻池), director of the KMT’s Policy Committee, said KMT lawmakers would support the proposal, as the tax plan was ironed out after careful consideration in a bid to abide by the taxation fairness principle and it is expected to have a minimal impact on the local bourse.