Average daily day trading transaction on the local stock market climbed to a high of NT$66.1 billion (US$2.36 billion) in March, prompting a call for the Financial Supervisory Commission (FSC) to rethink an extension of a tax cut on day trading transactions.
In April 2017, a tax cut on day trading transactions — from 0.003 percent to 0.0015 percent — took effect. It was to return to the previous level next year, but the commission and the Ministry of Finance have proposed extended the cut for another five years.
Experts said the policy favors intraday traders and has made the local stock market a “casino.”
Appacus Foundation president Sean Chen (陳沖), a former vice premier and former FSC chairman, on Monday said that the tax cut extension would incentivize investors to engage in day trading rather than make long-term investments.
The tax cut was implemented as a “shot in arm” for the market, as turnover was less than NT$100 billion in a single day, but turnover soared to more than NT$700 billion last month, Chen said.
If the government normalizes the tax cut, it would send a message to investors that day trading has better tax rates than long-term investing, and would make the market a “casino,” he said.
FSC Chairman Thomas Huang (黃天牧) told reporters on the sidelines of an event in Taipei on Monday that while he respected Chen’s opinion, he did not agree with the casino analogy.
Whether reducing a single tax makes the market a “casino” needs careful consideration, Huang said, adding that further discussion about the extension were welcomed.
Day trading is just a mechanism that allows investors to make profits by buying or selling shares over short periods, and can boost the market trading volume, the commission said.
Average daily day trading transaction advanced to a record NT$66.1 billion in March, accounting for 30.34 percent of total market turnover, up from an average of NT$10.6 billion and a weighting of 9.63 percent from April 2016 to March 2017, a year before the tax cut took effect, FSC data showed.
The average daily amount of day trading transactions rose to NT$37.5 billion during the first year of the tax reduction, making up 22.34 percent of total transactions, the data showed.
The number of day traders increased to 108,000 at the end of last year, up from 44,000 a year earlier, the data showed.
ELECTRONICS BOOST: A predicted surge in exports would likely be driven by ICT products, exports of which have soared 84.7 percent from a year earlier, DBS said DBS Bank Ltd (星展銀行) yesterday raised its GDP growth forecast for Taiwan this year to 4 percent from 3 percent, citing robust demand for artificial intelligence (AI)-related exports and accelerated shipment activity, which are expected to offset potential headwinds from US tariffs. “Our GDP growth forecast for 2025 is revised up to 4 percent from 3 percent to reflect front-loaded exports and strong AI demand,” Singapore-based DBS senior economist Ma Tieying (馬鐵英) said in an online briefing. Taiwan’s second-quarter performance beat expectations, with GDP growth likely surpassing 5 percent, driven by a 34.1 percent year-on-year increase in exports, Ma said, citing government
‘REMARKABLE SHOWING’: The economy likely grew 5 percent in the first half of the year, although it would likely taper off significantly, TIER economist Gordon Sun said The Taiwan Institute of Economic Research (TIER) yesterday raised Taiwan’s GDP growth forecast for this year to 3.02 percent, citing robust export-driven expansion in the first half that is likely to give way to a notable slowdown later in the year as the front-loading of global shipments fades. The revised projection marks an upward adjustment of 0.11 percentage points from April’s estimate, driven by a surge in exports and corporate inventory buildup ahead of possible US tariff hikes, TIER economist Gordon Sun (孫明德) told a news conference in Taipei. Taiwan’s economy likely grew more than 5 percent in the first six months
SMART MANUFACTURING: The company aims to have its production close to the market end, but attracting investment is still a challenge, the firm’s president said Delta Electronics Inc (台達電) yesterday said its long-term global production plan would stay unchanged amid geopolitical and tariff policy uncertainties, citing its diversified global deployment. With operations in Taiwan, Thailand, China, India, Europe and the US, Delta follows a “produce at the market end” strategy and bases its production on customer demand, with major site plans unchanged, Delta president Simon Chang (張訓海) said on the sidelines of a company event yesterday. Thailand would remain Delta’s second headquarters, as stated in its first-quarter earnings conference, with its plant there adopting a full smart manufacturing system, Chang said. Thailand is the firm’s second-largest overseas
SUPPLY RESILIENCE: The extra expense would be worth it, as the US firm is diversifying chip sourcing to avert disruptions similar to the one during the pandemic, the CEO said Advanced Micro Devices Inc (AMD) chief executive officer Lisa Su (蘇姿丰) on Wednesday said that the chips her company gets from supplier Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) would cost more when they are produced in TSMC’s Arizona facilities. Compared with similar parts from factories in Taiwan, the US chips would be “more than 5 percent, but less than 20 percent” in terms of higher costs, she said at an artificial intelligence (AI) event in Washington. AMD expects its first chips from TSMC’s Arizona facilities by the end of the year, Su said. The extra expense is worth it, because the company is
RSS