Economy

New MOF minister makes stock tax top priority

MOF Minister Chang Sheng-ford sees implementation of a securities gains tax as his first priority, with revisions to be made as needed. (CNA)

• Publication Date：06/01/2012
• Source： Taiwan Today

New ROC Minister of Finance Chang Sheng-ford said May 31 that implementing the central government’s proposed securities gains tax will be his top priority.

Chang replaces former Finance Minister Christina Y. Liu, who resigned in protest over the Kuomintang legislative caucus’s proposed stock gains tax plan.

The KMT version was put forward May 28 when the caucus also rejected the original version of amendments to the Income Tax Act formulated by the Ministry of Finance and approved by the Executive Yuan in late April.

President Ma Ying-jeou approved Chang’s appointment in the late evening May 31.

Chang said he hopes a consensus draft version of the securities tax plan can be passed by the Legislative Yuan before the end of its current session.

“The most important thing is to implement a tax plan as soon as possible. Revisions can then be made later to further improve it,” he said.

“It’s a basic principle that if you have income, it should be taxed, so of course I support a tax on capital gains,” he added.

A new draft version of the securities gains tax, incorporating a two-stage approach, was formulated later the same day in a meeting between Premier Sean C. Chen and the KMT caucus.

In the first phase, a dual-track system would be used, under which individual investors could choose at the start of the year either to have their capital gains from securities taxed based on the stock market’s level—with the tax to kick in only when the market is above 8,500 points—or to include such gains in the calculation of their annual income taxes, at a rate of between 5 percent and 40 percent.

In the second phase, to take effect in 2017, the first option would be scrapped.

Under the second option, individual investors would be able to claim a 50-percent tax deduction on capital gains from stocks held for more than a year, and to offset their stock losses against earnings over a three-year period in calculating their income. (SB-THN)