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Fate of capital gains tax bill rests with Legislature: minister

Fate of capital gains tax bill rests with Legislature: minister

Taipei, May 2 (CNA) The Ministry of Finance will respect whatever decisions the Legislature makes on a bill to introduce a stock gains tax, including its decisions on whether and when to pass the bill, Finance Minister Christina Liu said in a legislative hearing Thursday. However, Lu said she is hoping to see the bill clear the legislative floor, so as to increase the contribution of higher income earners to tax revenue and realize the principle of paying taxes according to ability. The Cabinet's version of the bill, which was submitted to the Legislature on Tuesday, would tax individuals' annual net gains on stock investments of more than NT$4 million (US$133,300) at a rate of 15 percent to 20 percent. Institutional investors will be required to pay a 12 percent tax on net gains in excess of NT$500,000 a year, according to the Cabinet's bill, which will be considered along with six other versions put forth by legislators. As the current legislative session ends at the end of this month, the bill is not likely to clear the Legislature until next session, which opens in September. While the capital gains tax is considered a significant step forward in the government's effort to narrow the income gap in Taiwan, it has drawn strong protest from brokerage firms, which fear the tax could result in an exodus of investors from the stock market. Yuanta Securities President Lin Tien-fu argued Wednesday that the tax will lead to sluggish turnover and poor liquidity, which in turn will hurt the capital market and the overall economic environment. If the daily turnover on the stock market remains below NT$90 billion, some brokerage firms would not be able to survive for long, Lin said. Meanwhile, Chinese National Federation of Industries Chairman Hsu Sheng-hsiung said he does not think taxing stock gains is a good idea because the tax will involve complicated calculations and yet may not generate any revenue for the government because of loss carryover. Instead of imposing a capital gains tax, the government could consider raising the securities transaction tax rate from the current 0.3 percent to between 0.306 percent and 0.33 percent, Hsu suggested. (By Justin Su, Tien Yu-pin and Y.F. Low)


Updated : 2021-04-22 02:38 GMT+08:00