Ruling and opposition lawmakers yesterday welcomed a proposed luxury tax aimed at stemming property speculation, but said there was a need for extra conditions to prevent an unnecessary negative impact on the economy.
The lawmakers’ remarks came after the Ministry of the Interior released a report showing that property purchases nationwide rose to their highest level in almost three years in January, despite the government implementing a series of measures designed to cool the property market.
Chinese Nationalist Party (KMT) Legislator Sun Ta-chien (孫大千) said he would support the luxury tax plan, but that it might require minor revisions when the Cabinet submits the draft to the legislature.
Sun, whose constituency is in Taoyuan County, said property fever is limited to Greater Taipei and parts of central and southern Taiwan, and the tax should target those areas alone.
The government has proposed imposing heavy taxes on short-term purchases of property, subjecting deals to a 15 percent tax if the property is sold within a year of being purchased and 10 percent if it is sold within two years.
“House prices in many parts of the country have not increased that much,” Sun said. “It is worth discussing whether to limit the tax to areas with unreasonably high house prices.”
Alex Fai (費鴻泰), another KMT lawmaker and the convener of the legislature’s Finance Committee, said he fully endorsed the luxury tax, as long as the bill does not apply retroactively.
“A selective implementation would weaken the levy’s intended effect,” Fai said by telephone.
However, Fai said he would invite Council for the Economic Planning and Development Minister Christina Liu (劉憶如) to speak to the committee and elaborate on her ideas for an exclusionary clause.
Liu has suggested the need for an exclusionary provision for short-term property transfers because of relocation, job changes and other non-investment purposes.
“If an exclusionary clause is both desirable and feasible, I’m willing to consider it,” Fai said, adding that he would start the review once the bill has been sent to the committee.
The Democratic Progressive Party (DPP) also gave its backing, but DPP lawmakers doubted whether the tax could effectively narrow the income gap or curb property speculation.
“We support the luxury tax in principle, although we have yet to see the bill,” DPP legislative caucus whip Gao Jyh-peng (高志鵬) said.
However, Gao said the levy would only serve only to add a slight financial burden on the rich.
“The government should tax capital gains if it is serious about distributing wealth more equitably,” Gao said. “Any measure short of that is nothing more than just words.”
Non-Partisan Solidarity Union Legislator Kang Shih-ju (康世儒), another member of the Finance Committee, said he would vote down the luxury tax on the grounds it may hurt the property sector and other industries, while failing to check speculation.
Kang said Hong Kong and China have both introduced tighter measures, but have failed to bring down real estate prices.
The latest government report showed that property transactions nationwide totaled 41,974 in January, the highest since May 2008 and the fourth straight month above the 40,000 level.
Stanley Su (蘇啟榮), head researcher at Sinyi Realty Co (信義房屋), attributed the figures to strong demand fueled partly by a market correction, but he said trading volume was likely to have peaked and could head downwards in the coming months.
“Potential buyers will wait and see until the tax plan is settled,” he said.
MULTIFACETED: A task force has analyzed possible scenarios and created responses to assist domestic industries in dealing with US tariffs, the economics minister said The Executive Yuan is tomorrow to announce countermeasures to US President Donald Trump’s planned reciprocal tariffs, although the details of the plan would not be made public until Monday next week, Minister of Economic Affairs J.W. Kuo (郭智輝) said yesterday. The Cabinet established an economic and trade task force in November last year to deal with US trade and tariff related issues, Kuo told reporters outside the legislature in Taipei. The task force has been analyzing and evaluating all kinds of scenarios to identify suitable responses and determine how best to assist domestic industries in managing the effects of Trump’s tariffs, he
TIGHT-LIPPED: UMC said it had no merger plans at the moment, after Nikkei Asia reported that the firm and GlobalFoundries were considering restarting merger talks United Microelectronics Corp (UMC, 聯電), the world’s No. 4 contract chipmaker, yesterday launched a new US$5 billion 12-inch chip factory in Singapore as part of its latest effort to diversify its manufacturing footprint amid growing geopolitical risks. The new factory, adjacent to UMC’s existing Singapore fab in the Pasir Res Wafer Fab Park, is scheduled to enter volume production next year, utilizing mature 22-nanometer and 28-nanometer process technologies, UMC said in a statement. The company plans to invest US$5 billion during the first phase of the new fab, which would have an installed capacity of 30,000 12-inch wafers per month, it said. The
Taiwan’s official purchasing managers’ index (PMI) last month rose 0.2 percentage points to 54.2, in a second consecutive month of expansion, thanks to front-loading demand intended to avoid potential US tariff hikes, the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday. While short-term demand appeared robust, uncertainties rose due to US President Donald Trump’s unpredictable trade policy, CIER president Lien Hsien-ming (連賢明) told a news conference in Taipei. Taiwan’s economy this year would be characterized by high-level fluctuations and the volatility would be wilder than most expect, Lien said Demand for electronics, particularly semiconductors, continues to benefit from US technology giants’ effort
‘SWASTICAR’: Tesla CEO Elon Musk’s close association with Donald Trump has prompted opponents to brand him a ‘Nazi’ and resulted in a dramatic drop in sales Demonstrators descended on Tesla Inc dealerships across the US, and in Europe and Canada on Saturday to protest company chief Elon Musk, who has amassed extraordinary power as a top adviser to US President Donald Trump. Waving signs with messages such as “Musk is stealing our money” and “Reclaim our country,” the protests largely took place peacefully following fiery episodes of vandalism on Tesla vehicles, dealerships and other facilities in recent weeks that US officials have denounced as terrorism. Hundreds rallied on Saturday outside the Tesla dealership in Manhattan. Some blasted Musk, the world’s richest man, while others demanded the shuttering of his