The Executive Yuan yesterday approved a draft bill to cut the transaction tax on day trading from 0.003 percent to 0.0015 percent in a bid to stimulate the stock market, which has been hit by low trading volumes.
It is estimated that the measure would cost the government NT$3.75 billion (US$116.24 million) in tax revenue per year, the Ministry of Finance said, but added that an expected jump in the volume of shares traded — taxed at the reduced rate — should cover the loss.
Day trading, which allows traders to buy and sell a stock in a single session — or vice versa — accounts for about 10 percent of total daily trading volumes on the local bourse.
Day trading volume would need to reach NT$10 billion per day to make up for the cost incurred by the tax cut, but taking into account a predicted increase in non-day trading associated with the cut, day trading volume of NT$7.5 billion would be sufficient to cover the cost, the ministry said.
In the most optimistic scenario, in which the knock-on effect of the stimulus measure reaches its maximum potential, the cost of the tax could be recovered if the day trading volume reaches NT$5 billion.
The cut is to be implemented for a trial period of one year, and the Cabinet is to then make a decision on whether to continue the measure depending on trading volumes and tax revenues, Minister of Finance Sheu Yu-jer (許虞哲) said.
The proposed tax cut is expected to clear the legislative floor in an upcoming extraordinary session,
The Chinese Nationalist Party (KMT) also supports the tax cut, although the party’s legislative caucus has criticized the Democratic Progressive Party for attempting to bulldoze a variety of bills in the special session, Sheu said.
The Financial Supervisory Commission has also rolled out a stock market stimulus plan. Investors are now able to buy a fixed New Taiwan dollar amount of stocks and exchange-traded funds (ETFs) on a fixed-term basis, to allow cash redemption of ETFs, in a bid to allow more flexibility for the insurance sector to invest in the stock market and to raise the cap on bank investments in the over-the-counter market.
An increase in Taiwanese boats using China-made automatic identification systems (AIS) could confuse coast guards patrolling waters off Taiwan’s southwest coast and become a loophole in the national security system, sources familiar with the matter said yesterday. Taiwan ADIZ, a Facebook page created by enthusiasts who monitor Chinese military activities in airspace and waters off Taiwan’s southwest coast, on Saturday identified what seemed to be a Chinese cargo container ship near Penghu County. The Coast Guard Administration went to the location after receiving the tip and found that it was a Taiwanese yacht, which had a Chinese AIS installed. Similar instances had also
GOOD DIPLOMACY: The KMT has maintained close contact with representative offices in Taiwan and had extended an invitation to Russia as well, the KMT said The Chinese Nationalist Party (KMT) would “appropriately handle” the fallout from an invitation it had extended to Russia’s representative to Taipei to attend its international banquet last month, KMT Chairman Eric Chu (朱立倫) said yesterday. US and EU representatives in Taiwan boycotted the event, and only later agreed to attend after the KMT rescinded its invitation to the Russian representative. The KMT has maintained long-term close contact with all representative offices and embassies in Taiwan, and had extended the invitation as a practice of good diplomacy, Chu said. “Some EU countries have expressed their opinions of Russia, and the KMT respects that,” he
VIGILANCE: The military is paying close attention to actions that might damage peace and stability in the region, the deputy minister of national defense said The People’s Republic of China (PRC) might consider initiating a hack on Taiwanese networks on May 20, the day of the inauguration ceremony of president-elect William Lai (賴清德), sources familiar with cross-strait issues said. While US Secretary of State Anthony Blinken’s statement of the US expectation “that all sides will conduct themselves with restraint and prudence in the period ahead” would prevent military actions by China, Beijing could still try to sabotage Taiwan’s inauguration ceremony, the source said. China might gain access to the video screens outside of the Presidential Office Building and display embarrassing messages from Beijing, such as congratulating Lai
Four China Coast Guard ships briefly sailed through prohibited waters near Kinmen County, Taipei said, urging Beijing to stop actions that endanger navigation safety. The Chinese ships entered waters south of Kinmen, 5km from the Chinese city of Xiamen, at about 3:30pm on Monday, the Coast Guard Administration said in a statement later the same day. The ships “sailed out of our prohibited and restricted waters” about an hour later, the agency said, urging Beijing to immediately stop “behavior that endangers navigation safety.” Ministry of National Defense spokesman Sun Li-fang (孫立方) yesterday told reporters that Taiwan would boost support to the Coast Guard