Pro­pos­als put for­ward to trans­form stock in­come tax ar­range­ment


Kuom­intang (KMT) law­maker Luo Ming-cai ( ) has pro­posed amend­ing the In­come Tax Act and abol­ish­ing stock in­come tax in or­der to give Taipei’s un­promis­ing stock mar­ket a kick.

The col­lec­tion of stock in­come tax has al­ready been post­poned un­til 2018.

Luo started to cam­paign three days ago and has al­ready reached the min­i­mum thresh­old — 15 leg­is­la­tors — to raise a dis­cus­sion. Nonethe­less, he will not of­fi­cially pro­pose the new act be­fore he has the sup­port of over 57 leg­is­la­tors.

If stock in­come tax is to be elim­i­nated, and trans­ac­tion tax is re­duced to 0.2 per­cent, as Luo has been pro­mot­ing, daily stock mar­ket trans­ac­tions could re­turn to NT$160 bil­lion from less than NT$80 bil­lion, said Luo.

How­ever, some KMT leg­is­la­tors con­sider the abol­ish­ing of stock in­come tax a dou­ble-edged sword; there­fore, sug­ges­tions to freeze the tax for five years were also heard.

The idea of freez­ing it for five years came about be­cause of dif­fi­cul­ties elim­i­nat­ing it dur­ing Pres­i­dent Ma Ying-jeou’s gov­er­nance; on the other hand, it could pre­vent Demo­cratic Pro­gres­sive Party (DPP) pres­i­den­tial can­di­date and Chair­woman Tsai Ying-wen ( ) from tak­ing the credit as ru­mors are that she has al­ready com­mit­ted to putting an end to stock in­come tax if she is elected, ac­cord­ing to Luo.

In re­sponse to Luo’s propo­si­tion, the Min­istry of Fi­nance (MOF) said that col­lect­ing stock in­come tax is a done deal; so far they have not re­ceived any in­for­ma­tion on freez­ing it for five years and the MOF con­sid­ers the act in­ad­e­quate at the mo­ment.

Ac­cord­ing to lo­cal anal­y­sis, if the DPP takes gov­er­nance in the fu­ture and can­cels stock in­come tax, it will al­low a few days of promis­ing fig­ures on the stock mar­ket, but it will not last too long. The cur­rent act only af­fects stock­hold­ers who have an an­nual trans­ac­tion of over NT$1 bil­lion, who only make up a small seg­ment of so­ci­ety. In other words, stock in­come tax is not a fac­tor that holds peo­ple back from div­ing into the mar­ket and cre­at­ing rev­enue.

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