The nation’s securities and futures houses yesterday remained dissatisfied with the government’s revised plan to tax capital gains on securities and futures investments, and said they would seek recourse with lawmakers to prevent its enactment.
“We find the latest version disappointing, because it fails to ease concerns over potential fund outflows and shrinking trading volumes linked to the imposition of the capital gains tax,” Taiwan Securities Association (TSA, 證券公會) chairman Hwang Min-juh (黃敏助) said yesterday.
Turnover on the stock market remained low at NT$68.78 billion (US$2.33 billion) yesterday, with the TAIEX shedding 0.55 percent at the close, Taiwan Stock Exchange data showed.
Investors will not keep their funds in Taiwan simply because the Ministry of Finance raised the tax exemption amount to NT$4 million, from the previous NT$3 million, Hwang said, adding that securities investments in Singapore and Hong Kong are not subject to a capital gains tax.
The association insisted that the ministry lower or scrap the securities transaction levy if it taxes capital gains. It said the securities transaction tax, currently at 0.3 percent of the trading amount, is equivalent to levies ranging from 42 percent to 150 percent of capital gains for investments with varied returns.
The association urged lawmakers to reject the Cabinet’s tax proposal and maintain the “status quo,” or consult the association’s draft if the legislature intends to proceed with the tax reform.
The association’s draft calls for merging the capital gains tax into a 10 percent minimum income tax, which would apply to institutional stock investments in both listed and unlisted companies, with the exemption threshold at NT$2 million. The tax rate should be halved for share holdings of two years and longer, the draft said.
Individual investors, foreign or domestic, should be exempt from any capital gains tax until institutional players account for more than 50 percent of daily turnover, from the present 30 percent, the association said.
Likewise, futures companies said they would take their case to the legislature now that the Cabinet has sided with the Ministry of Finance.
“It is both confusing and unfair to subject institutional players to capital gains tax on futures investments, but exempt all individual participants from the planned levy,” Lu Ting-chieh (盧廷劼), secretary-general of the Chinese National Futures Association (期貨公會), said by telephone.
Futures investments, intended to hedge against losses in spot securities, transcend borders and investor identities, said Lu, who was chief secretary at the Financial Supervisory Commission in 2009-2010 when Premier Sean Chen (陳冲) served as the commission’s chairman.
The association stands by its earlier plea that the government either taxes futures transactions or capital gains, but not both, Lu said.
Several social groups also said yesterday they would not accept the Cabinet’s proposal of the securities gains tax, as this version breaks the “ability to pay” principle.
“The Cabinet’s proposal was a huge frustration for Minister of Finance Christina Liu (劉憶如),” said the convener of the Alliance for Fair Tax Reform (公平稅改聯盟), Wang Jung-chang (王榮璋).
The proposal indicated that either the Cabinet or President Ma Ying-jeou (馬英九) was not backing Liu, Wang added.
Wang said the version was too compromising to be agreed to by the salaried classes, who pay a consolidated income tax, and will deepen society’s hostility toward the rich.
If the government failed to tax securities gains, it will be difficult to convince people that upcoming tax reformation, such as capital gains tax on land investments, would be able to go further, Wang added.
“If the government always compromises to suit the rich, President Ma will fail to fulfill his campaign promises,” Wang said.
Meanwhile, civic groups also said the Taiwan Securities Association’s move to oppose the tax would block tax reformation and hurt the nation’s progress.
“If rich people earning money from the asset market do not need to be taxed, why should salarymen pay income tax?” Taiwan Labor Front (台灣勞工陣線) secretary-general Son Yu-lian (孫友聯) said.
In response to the securities representatives’ threat to initiate a public protest next month, civic groups said they would not rule out doing the same during the tax declaration period.
Convener of the Anti-Poverty Alliance (反貧困聯盟) Chien Hsi-chieh (簡錫堦) said he expects Liu to hang on in the upcoming wars in the Legislature.
“I think the current pressure raised by business heavyweights has isolated her,” Chien said.
However, Chien said he believes Liu’s stand would go down in history.
The Chinese National Federation of Industries (工商協進會), which had a meeting with Chen and Cabinet ministers on Wednesday, said it needed more time to form an opinion, adding that more business leaders in the industrial and commercial sectors would meet with Minister of Finance Christina Liu this afternoon to gain a better understanding of the issue.
‘SWASTICAR’: Tesla CEO Elon Musk’s close association with Donald Trump has prompted opponents to brand him a ‘Nazi’ and resulted in a dramatic drop in sales Demonstrators descended on Tesla Inc dealerships across the US, and in Europe and Canada on Saturday to protest company chief Elon Musk, who has amassed extraordinary power as a top adviser to US President Donald Trump. Waving signs with messages such as “Musk is stealing our money” and “Reclaim our country,” the protests largely took place peacefully following fiery episodes of vandalism on Tesla vehicles, dealerships and other facilities in recent weeks that US officials have denounced as terrorism. Hundreds rallied on Saturday outside the Tesla dealership in Manhattan. Some blasted Musk, the world’s richest man, while others demanded the shuttering of his
ADVERSARIES: The new list includes 11 entities in China and one in Taiwan, which is a local branch of Chinese cloud computing firm Inspur Group The US added dozens of entities to a trade blacklist on Tuesday, the US Department of Commerce said, in part to disrupt Beijing’s artificial intelligence (AI) and advanced computing capabilities. The action affects 80 entities from countries including China, the United Arab Emirates and Iran, with the commerce department citing their “activities contrary to US national security and foreign policy.” Those added to the “entity list” are restricted from obtaining US items and technologies without government authorization. “We will not allow adversaries to exploit American technology to bolster their own militaries and threaten American lives,” US Secretary of Commerce Howard Lutnick said. The entities
Minister of Finance Chuang Tsui-yun (莊翠雲) yesterday told lawmakers that she “would not speculate,” but a “response plan” has been prepared in case Taiwan is targeted by US President Donald Trump’s reciprocal tariffs, which are to be announced on Wednesday next week. The Trump administration, including US Secretary of the Treasury Scott Bessent, has said that much of the proposed reciprocal tariffs would focus on the 15 countries that have the highest trade surpluses with the US. Bessent has referred to those countries as the “dirty 15,” but has not named them. Last year, Taiwan’s US$73.9 billion trade surplus with the US
Prices of gasoline and diesel products at domestic gas stations are to fall NT$0.2 and NT$0.1 per liter respectively this week, even though international crude oil prices rose last week, CPC Corp, Taiwan (台灣中油) and Formosa Petrochemical Corp (台塑石化) said yesterday. International crude oil prices continued rising last week, as the US Energy Information Administration reported a larger-than-expected drop in US commercial crude oil inventories, CPC said in a statement. Based on the company’s floating oil price formula, the cost of crude oil rose 2.38 percent last week from a week earlier, it said. News that US President Donald Trump plans a “secondary
RSS