Hung pledges new tax on sale of stocks

KMT can­di­date be­lieves move could at­tract for­eign in­vestors

The China Post - - FRONT PAGE - BY ENRU LIN

Kuom­intang (KMT) pres­i­den­tial can­di­date Hung Hsiu-chu (

) yesterday pledged to re­form how stock sales on the lo­cal mar­ket are taxed.

Hung, speak­ing at the KMT head­quar­ters, pro­posed levy­ing a 0.25-per­cent tax on stock trans­ac­tions and a 0.05-per­cent tax on stock trans­ac­tion gains.

She also pro­posed can­cel­ing a clause that ex­empts for­eign in­sti­tu­tional in­vestors from cap­i­tal gains tax on se­cu­ri­ties trad­ing.

Cur­rently there is a trans­ac­tion tax of 0.3 per­cent on stock mar­ket trades and no ac­tive tax on gains from trans­ac­tions.

In 2013, the Leg­isla­tive Yuan passed a 15-per­cent stock gains tax on large-scale traders, which can be re­placed by an ex­tra 0.1- per­cent tax on any stock trans­ac­tions in ex­cess of NT$1 bil­lion.

The tax was sched­uled to come into force this past Jan­uary but has been sus­pended un­til 2018 due to mar­ket re­sis­tance.

Hung’s plan, if ap­proved, would re­place both the cur­rent

and up­com­ing tax schemes.

Con­sen­sus Needed: Ex­ec­u­tive

Yuan

Hung told re­porters that her team was in talks with the Ex­ec­u­tive Yuan and the rul­ing party’s leg­isla­tive cau­cus, in hopes of pro­mot­ing the tax plan in the com­ing leg­isla­tive ses­sion.

The Pres­i­den­tial Of­fice yesterday de­clined to com­ment, while the Ex­ec­u­tive Yuan con­firmed that the think tank of the KMT head­quar­ters had pre­sented the plan to Premier Mao Chi-kuo ( ).

The premier be­lieves the plan can be dis­cussed but that the Leg­isla­tive Yuan must form its own con­sen­sus, ac­cord­ing to a Cab­i­net state­ment.

Vul­ner­a­ble to Vul­tures

Hung said that the value of Tai­wan’s stock mar­ket has been de­clin­ing both in terms of the priceearn­ings ra­tio and the price-book ra­tio.

Sink­ing value makes Tai­wanese com­pa­nies vul­ner­a­ble to over­seas “vul­tures” that can, at a low price, buy up years of hard work and shrink the do­mes­tic job mar­ket, she said.

Hung said her re­form plan for tax­a­tion could help curb the slide in the mar­ket by elim­i­nat­ing fac­tors of un­cer­tainty, and that it would also elim­i­nate un­equal tax­a­tion on do­mes­tic and for­eign in­vestors.

For long-term re­cov­ery, Tai­wan should move to­ward be­com­ing a free-trade econ­omy. To achieve short-term eco­nomic re­cov­ery, Tai­wan needs to ac­knowl­edge that the down­turn of its cap­i­tal mar­ket is a se­ri­ous risk, she said.

At the press con­fer­ence, Hung was joined by Yiin Chii-ming (

), pres­i­dent of the KMT’s Na­tional Pol­icy Foun­da­tion (

) and a for­mer min­is­ter of eco­nomic af­fairs, and KMT law­maker Tseng Chu-wei ( ).

CNA

Kuom­intang (KMT) pres­i­den­tial can­di­date Hung Hsiu-chu ( her plan for stock gains tax re­form in Taipei, yesterday.

) an­nounces

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