The nation’s top decisionmakers yesterday voiced different opinions regarding the ongoing debate over the capital gains tax, with Financial Supervisory Commission Chairman William Tseng (曾銘宗) and central bank Governor Perng Fai-nan (彭淮南) supporting its removal, while Minister of Finance Chang Sheng-ford (張盛和) remains a supporter of amendments proposed by the Chinese Nationalist Party (KMT).
Regarding the practice that has been widely seen as a drag contributing to the local bourse’s listless average daily turnover, Tseng and Perng said that they are in favor of removing the tax, as investors’ market returns are already included inion tax.
Chang maintained that the KMT proposal is the least controversial option and that it also has a one-month lead in the legislature’s review process.
Photo: Chien Jung-fong, Taipei Times
According to Chang, implementing the KMT’s amendments would lead to the same near-term outcome as abolishing the capital gains tax outright.
However, Chang said that once rallies at the stock market take hold, controversies would only rise again when voices calling for investors to pay taxes on gains grow strident.
“The KMT’s proposal is the path towards the least controversy as it contains a capital gains tax component,” Chang said.
The KMT version of the capital gains tax reform proposes that the 0.3 percent securities transaction tax be divided into two parts: a 0.25 percent securities transaction tax and a 0.05 percent capital gains tax. In addition, active stock traders could choose, before investing, to pay either the 0.05 percent tax on transactions as capital gains tax, or a 15 percent tax on the stock gains earned thereafter.
Meanwhile, KMT presidential candidate Eric Chu (朱立倫) openly criticized the tax as one of the more controversial policies implemented by President Ma Ying-jeou’s (馬英九) administration, saying that he supports the removing the tax.
Tseng said that he hopes to see the KMT’s amendments complete the approval process as soon as possible to mitigate lingering uncertainties in the market. He also did not rule out abolishing the tax when prompted by lawmakers.
As of the end of last month, average turnover on the TAIEX was gauged at around NT$116 billion (US$3.54 billion), less than the NT$120 billion to NT$130 billion Tseng said he had hoped to see.
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