Chinese Nationalist Party (KMT) presidential candidate Hung Hsiu-chu (洪秀柱) yesterday launched her second major economic policy, targeting reform of securities transaction and capital gains taxes, which have for years been fiercely debated.
Securities transactions are taxed at 0.3 percent, while traders who sell more than NT$1 billion (US$30.6 million) of local shares a year were to face additional taxes, due to a policy imposed in December last year, but which was put off for three years.
Hung said at a news conference in Taipei that her policy would divide the 0.3 percent securities transaction tax into two parts: a 0.25 percent securities transaction tax and a 0.05 percent capital gains tax, with no extra charges for “big traders.”
Photo: Chien Jung-fong, Taipei Times
Also to be reformed is the “implementation of tax justice,” scrapping different treatment for Taiwanese and foreign stock investors, with the latter currently not taxed on capital gains, she added.
Former minister of economic affairs Yiin Chii-ming (尹啟銘), speaking on behalf of the National Policy Foundation, a KMT think tank, said the proposed policy would allow active stock traders to choose, before investing, to pay either a 15 percent tax on stock gains or a 0.05 percent tax on transactions, on top of the 0.25 percent securities transaction tax.
Yiin said the proposed policy would bring no change to the overall 0.3 percent tax, while implementation and procedures would be much less complicated than a proposal by the Democratic Progressive Party (DPP) designed by former minister of finance Lin Chuan (林全).
With its 0.3 percent securities transaction tax and 0.1 percent capital gains tax, and the possibility of having to seek refunds in certain cases, the DPP’s proposal would not only constitute a financial burden to traders, but also a procedural one, Yiin said.
KMT Legislator Tseng Chu-wei (曾巨威), a retired finance professor nicknamed “the cannon of tax reform” who has raised numerous issues with the KMT caucus on bills concerning tax, said the point of controversy over securities transaction taxes “has always been a dispute over whether it should include a capital gains tax.”
“[Hung’s version] would put this dispute to rest,” Tseng said.
“It is a new framework and a new opportunity for Taiwan to initiate tax reform,” he added.
“It returns the right to choose how to be taxed to investors — whether to be taxed on transactions or to haggle with the government over the gains to be taxed — which is different from the existing scenario in which it is the government and interest groups that have the say in the levying of capital gains taxes,” Tseng said.
Hung said the policy would be pushed in the next legislative plenary session, which is to start next month, rather than waiting until her possible presidency.
“The economy cannot afford to wait,” she said.
At a separate news conference later yesterday, the KMT caucus endorsed the proposal, affirming that the caucus would take legislative action over the matter in the next session.
Elsewhere, Lin said that Hung’s proposal would be tantamount to canceling all the reforms made and abandoning capital gains taxation.
It is a proposal that would “regress too much” and would not help fatten the state coffer, Lin said.
There is no upside for tax revenues in Hung’s proposal, which is in fact a compromise, Lin added.
Taiwan has received more than US$70 million in royalties as of the end of last year from developing the F-16V jet as countries worldwide purchase or upgrade to this popular model, government and military officials said on Saturday. Taiwan funded the development of the F-16V jet and ended up the sole investor as other countries withdrew from the program. Now the F-16V is increasingly popular and countries must pay Taiwan a percentage in royalties when they purchase new F-16V aircraft or upgrade older F-16 models. The next five years are expected to be the peak for these royalties, with Taiwan potentially earning
STAY IN YOUR LANE: As the US and Israel attack Iran, the ministry has warned China not to overstep by including Taiwanese citizens in its evacuation orders The Ministry of Foreign Affairs (MOFA) yesterday rebuked a statement by China’s embassy in Israel that it would evacuate Taiwanese holders of Chinese travel documents from Israel amid the latter’s escalating conflict with Iran. Tensions have risen across the Middle East in the wake of US and Israeli airstrikes on Iran beginning Saturday. China subsequently issued an evacuation notice for its citizens. In a news release, the Chinese embassy in Israel said holders of “Taiwan compatriot permits (台胞證)” issued to Taiwanese nationals by Chinese authorities for travel to China — could register for evacuation to Egypt. In Taipei, the ministry yesterday said Taiwan
Taiwan is awaiting official notification from the US regarding the status of the Agreement on Reciprocal Trade (ART) after the US Supreme Court ruled US President Donald Trump's global tariffs unconstitutional. Speaking to reporters before a legislative hearing today, Premier Cho Jung-tai (卓榮泰) said that Taiwan's negotiation team remains focused on ensuring that the bilateral trade deal remains intact despite the legal challenge to Trump's tariff policy. "The US has pledged to notify its trade partners once the subsequent administrative and legal processes are finalized, and that certainly includes Taiwan," Cho said when asked about opposition parties’ doubts that the ART was
If China chose to invade Taiwan tomorrow, it would only have to sever three undersea fiber-optic cable clusters to cause a data blackout, Jason Hsu (許毓仁), a senior fellow at the Hudson Institute and former Chinese Nationalist Party (KMT) legislator, told a US security panel yesterday. In a Taiwan contingency, cable disruption would be one of the earliest preinvasion actions and the signal that escalation had begun, he said, adding that Taiwan’s current cable repair capabilities are insufficient. The US-China Economic and Security Review Commission (USCC) yesterday held a hearing on US-China Competition Under the Sea, with Hsu speaking on
RSS