In the News

KMT finds way forward on securities gains tax

Chang Sheng-ford, former deputy finance minister, is set to take over as head of the MOF. (CNA)

• Publication Date：05/31/2012
• Source： Taiwan Today

Representatives from the ROC Presidential Office, Executive Yuan and Kuomingtang legislative caucus arrived at a preliminary consensus May 30 on the central government’s proposed securities gains tax.

According to Presidential Office spokesman Fan Chiang Tai-chi, it was agreed that the stipulation allowing for corporations to enjoy a tax deduction of 50 percent on earnings from stocks held for more than a year would be revised to a three-year period, while the rules for individual investors would be maintained.

The proposed revision was part of the draft version put forward by KMT lawmakers May 28, when they also rejected the original version of revisions to the Income Tax Act formulated by the Ministry of Finance and approved by the Executive Yuan in late April.

Finance Minister Christina Y. Liu resigned May 29 in protest against the legislators’ bill, under which she said “those who make substantial profits from securities trading will not have to pay taxes on their capital gains.” Premier Sean C. Chen accepted her resignation May 30, and Cabinet spokesman Hu Yu-wei announced May 31 that Chen had appointed former Deputy Finance Minister Chang Sheng-ford to replace her.

KMT Legislator Wu Yu-sheng said after the coordination meeting, convened by Presidential Office Secretary-General Tseng Yung-chuan, that it was decided to keep the proposed dual-track system in the KMT legislative caucus’s integrated version.

Under this plan, individual investors could choose at the beginning of the year to have their capital gains from securities taxed according to the stock market’s level—with the tax to kick in only when the market is higher than 8,500 points—or to include such gains in the calculation of their annual income taxes.

Wu said he expects the consensus version to be reviewed by the Legislative Yuan’s Finance Committee June 4 after the ruling party caucus passes it at a meeting June 1.

Separately, at a KMT Central Standing Committee meeting May 30, ROC President Ma Ying-jeou, in his capacity as party chairman, reiterated his support for a securities gains tax. He instructed that talks to integrate the various proposals proceed as quickly as possible to minimize the impact of the controversy. (SB-THN)