MOF’s Liu proposes gradual stock gains tax implementation

By Camaron Kao ,The China Post

Finance Minister Christina Liu (劉憶如) emphasized gradual implementation of the proposed stock gains tax, despite the importance of building up a new system, during her meeting with Legislative Yuan Speaker Wang Jin-pyng (王金平) yesterday.

Liu met with Wang in the hope of winning his support in the review of the proposed stock gains tax, saying the gradual implementation of the tax would help to minimize concern over any negative impact on the market. Wang and Vice President Vincent Siew (蕭萬長) played a crucial role in a drastic turn in electricity pricing. Wang stated that the draft would pass through the same procedure at the Legislative Yuan as any other, and that the draft would be judged according to its economic impact, fairness, cost of implementation, and the increase to government income. Finance Minister Liu told Wang the tax is not only aimed at increasing government revenue, but also to tax high earners on the stock market who currently pay zero capital gains tax on their earnings. Time is running out, emphasized Liu, who argued that wary investors and unstable market levels will only begin to relax after the stock gains tax is ratified.

Dismissing concerns that the new tax will drive stock investors overseas, Liu said the proposed tax of NT$100,000 (US$3,333) to NT$200,000 (US$6,667) out of a NT$5 million (US$166,667) income is too small to threaten such large profits. Liu reiterated that the stock gains tax is not the sole cause of the recent stock market fluctuations, explaining how federal elections in France and the global economic climate have played a more influential role. According to the United Evening News, in a meeting between the premier and Kuomintang legislators, the lawmakers doubted the Legislative Yuan would pass the controversial stock gains tax. Liu Rejects Hike to Stock Transaction Tax In response to the suggested alternative of raising the stock transaction taxes by 0.03 percent instead of implementing the proposed stock gains tax, Liu replied that this suggestion is not in accordance with the finance ministry’s ideal that the rich should contribute more to tax income. The government should not collect tax just from any arbitrary person, the minister said. It is not fair to put the burden of the government deficit upon 3.3 million people who have already paid their stock transaction tax, according to Liu. We should find those who have the ability to pay and have not, Liu said.