The TAIEX tumbled 195.41 points, or 2.67 percent, to close at 7,106.09 yesterday, making it the worst performer among Asian bourses, as revisions to the planned capital gains tax on big stock players and major shareholders revived unease, analysts said.
Turnover totaled NT$79.47 billion (US$2.66 billion) with losses across the board except in the energy sector. Automakers, semiconductors and optical product makers bore the brunt of the sell-off, Taiwan Stock Exchange data showed.
“The ‘anti-rich’ clause in the latest plan is harsh for big players and major shareholders, and would drive them to cut holdings until the uncertainty clears,” said Doris Lee (李穗佳), an analyst at Taishin Securities Investment Trust Co (台新投信).
More funds would flee the market as the bill gains headway in the legislature next week, Lee said. The legislature’s Finance Committee plans to take up the matter on Monday.
The bill would subject individuals whose annual net income, other than income earned from securities trading, exceeds NT$5 million (US$167,050), and those who hold more than a 3 percent stake in listed companies, to a capital gains tax on a par with present income tax rates of between 5 percent and 40 percent.
Chinese Nationalist Party (KMT) Legislator Alex Tsai (蔡正元) said the taxable threshold would be lowered to NT$3 million in 2017, by which time investors should have grown used to the new regime.
If written into law, the tax is expected to affect 20,000 people next year and 40,000 in its second stage, KMT lawmakers said.
Hig- income individuals account for a large portion of the transaction volume and their withdrawal would deal a serious blow to the bourse, independent stock analyst Lai Sian-jheng (賴憲政) said.
A capital gains tax of “up to 40 percent” would make Taiwan the world’s most hostile place for stock investments, Lai said, warning the levy would drive the wealthy to seek foreign citizenship. Lee Jing-tu (李金土), a celebrity individual investor, shared the concern, although individual investors will not be affected as long as the benchmark index stays below the 8,500-point mark.
“I’m no longer interested in the rationale for the tax reform,” Lee said. “No one gains if Taiwanese shares keep falling and volumes keep shrinking.”
Chinese National Federation of Industries (全國工業總會) chairman Rock Hsu (許勝雄) said he was tired of talk about the capital gains tax and urged the government to convene a national affairs conference to discuss fiscal enhancement measures.
A Ministry of Foreign Affairs official yesterday said that a delegation that visited China for an APEC meeting did not receive any kind of treatment that downgraded Taiwan’s sovereignty. Department of International Organizations Director-General Jonathan Sun (孫儉元) said that he and a group of ministry officials visited Shenzhen, China, to attend the APEC Informal Senior Officials’ Meeting last month. The trip went “smoothly and safely” for all Taiwanese delegates, as the Chinese side arranged the trip in accordance with long-standing practices, Sun said at the ministry’s weekly briefing. The Taiwanese group did not encounter any political suppression, he said. Sun made the remarks when
The Taiwanese passport ranked 33rd in a global listing of passports by convenience this month, rising three places from last month’s ranking, but matching its position in January last year. The Henley Passport Index, an international ranking of passports by the number of designations its holder can travel to without a visa, showed that the Taiwan passport enables holders to travel to 139 countries and territories without a visa. Singapore’s passport was ranked the most powerful with visa-free access to 192 destinations out of 227, according to the index published on Tuesday by UK-based migration investment consultancy firm Henley and Partners. Japan’s and
BROAD AGREEMENT: The two are nearing a trade deal to reduce Taiwan’s tariff to 15% and a commitment for TSMC to build five more fabs, a ‘New York Times’ report said Taiwan and the US have reached a broad consensus on a trade deal, the Executive Yuan’s Office of Trade Negotiations said yesterday, after a report said that Washington is set to reduce Taiwan’s tariff rate to 15 percent. The New York Times on Monday reported that the two nations are nearing a trade deal to reduce Taiwan’s tariff rate to 15 percent and commit Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) to building at least five more facilities in the US. “The agreement, which has been under negotiation for months, is being legally scrubbed and could be announced this month,” the paper said,
NATIONAL SECURITY THREAT: An official said that Guan Guan’s comments had gone beyond the threshold of free speech, as she advocated for the destruction of the ROC China-born media influencer Guan Guan’s (關關) residency permit has been revoked for repeatedly posting pro-China content that threatens national security, the National Immigration Agency said yesterday. Guan Guan has said many controversial things in her videos posted to Douyin (抖音), including “the red flag will soon be painted all over Taiwan” and “Taiwan is an inseparable part of China,” while expressing hope for expedited “reunification.” The agency received multiple reports alleging that Guan Guan had advocated for armed reunification last year. After investigating, the agency last month issued a notice requiring her to appear and account for her actions. Guan Guan appeared as required,
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