The Cabinet yesterday approved a proposal to extend a 50 percent tax cut for day trading transactions for another three years, saying that the measure has played an important role in invigorating the local stock market’s turnover and liquidity.
The bill, which must still be approved by the legislature, was the result of cross-ministerial negotiations a day earlier to iron out differences between the Ministry of Finance and the Financial Supervisory Commission (FSC).
The commission had pushed for a five-year extension to boost the local exchange and benefit the national treasury, but the ministry favored a shorter extension, as critics have questioned the fairness of the tax cut and voiced concerns over a potential speculation frenzy.
Photo: CNA
An ongoing stock rout hastened consensus-building, but failed to reverse the retreat in the TAIEX, which yesterday shed another 2.68 percent, or 450.87 points, to 16,375.40 on turnover of NT$431.276 billion (US$15.42 billion), Taiwan Stock Exchange data showed.
The volume this month tumbled from a daily average of NT$652.3 billion last month, it showed.
The ministry yesterday said it approved a proposal to extend the tax cut because trading has not grown out of control, but rather substantially energized the local exchange after the tax rate was reduced from 0.003 percent to 0.0015 percent.
Daily turnover was a modest NT$98.75 billion in 2016, with day trading generating NT$10.57 billion, or 9.6 percent, the FSC said.
The practice grew rapidly to NT$37.46 billion per day, accounting for 22.3 percent of TAIEX turnover of NT$154.41 billion in the first year after the tax cut in April 2017, the commission said.
The data showed that the tax cut had a positive impact on the relationship between day trading and daily turnover, which merited an extension of the scheme to maintain the health of the local stock market, the FSC said.
Day trading soared to 45 percent of daily turnover last month and contributed NT$451 million per day to the state coffers, much higher than NT$56 million before the tax cut, the ministry said.
Day trading accounts spiked this year, with 100,000 accounts added from January to April, 200,000 in May and 212,400 last month, data showed, as a nationwide level 3 COVID-19 alert drove interest in securities investments.
The FSC said that day trading could help lower investment risks, as it allows investors to correct mistakes on the same day.
The ministry first agreed to a tax cut for a year and later extended it through the end of this year to help the local capital market.
The ministry and the commission said they would meet with lawmakers to facilitate the passage of the tax cut.
Taiwan has arranged for about 8 million barrels of crude oil, or about one-third of its monthly needs, to be shipped from the Red Sea this month to bypass the Strait of Hormuz and ease domestic supply pressures, CPC Corp, Taiwan (CPC, 台灣中油) said yesterday. The state-run oil company has worked with Middle Eastern suppliers to secure routes other than the Strait of Hormuz, through which about 20 percent of the world’s oil and liquefied natural gas typically passes, CPC chairman Fang Jeng-zen (方振仁) said at a meeting of the legislature’s Economics Committee in Taipei. Suppliers in Saudi Arabia have indicated they
A global survey showed that 60 percent of Taiwanese had attained higher education, second only to Canada, the Ministry of the Interior said. Taiwan easily surpassed the global average of 43 percent and ranked ahead of major economies, including Japan, South Korea and the US, data from the Organisation for Economic Co-operation and Development (OECD) for 2024 showed. Taiwan has a high literacy rate, data released by the ministry showed. As of the end of last year, Taiwan had 20.617 million people aged 15 or older, accounting for 88.5 percent of the total population, with a literacy rate of 99.4 percent, the data
CCP ‘PAWN’? Beijing could use the KMT chairwoman’s visit to signal to the world that many people in Taiwan support the ‘one China’ principle, an academic said Chinese Nationalist Party (KMT) Chairwoman Cheng Li-wun (鄭麗文) yesterday arrived in China for a “peace” mission and potential meeting with Chinese President Xi Jinping (習近平), while a Taiwanese minister detailed the number of Chinese warships currently deployed around the nation. Cheng is visiting at a time of increased Chinese military pressure on Taiwan, as the opposition-dominated Legislative Yuan stalls a government plan for US$40 billion in extra defense spending. Speaking to reporters before going to the airport, Cheng said she was going on a “historic journey for peace,” but added that some people felt uneasy about her trip. “If you truly love Taiwan,
NEW LOW: The council in 2024 based predictions on a pessimistic estimate for the nation’s total fertility rate of 0.84, but last year that rate was 0.69, 17 percent lower An expected National Development Council (NDC) report expects the nation’s population to drop below 12 million by 2065, with the old-age dependency ratio to top 100 percent sooner than 2070, sources said yesterday. The council is slated to release its latest population projections in August, using an ultra-low fertility model, the sources said. The previous report projected that Taiwan’s population would fall to 14.37 million by 2070, but based on a new estimate of the total fertility rate (TFR) — the average number of children born to a woman over her lifetime — the population is expected to reach 12 million by
RSS