Despite the Cabinet’s announcement late on Wednesday night that it would halve the securities transaction tax, the TAIEX plunged 206.06 points, or 3.19 percent, to close at 6,251.95 yesterday, as investors voiced doubts that the measure could revitalize the equity market.
Turnover was relatively light at NT$854.55 billion (US$2.73 billion), adding uncertainty to the Cabinet’s hope that the state coffers may benefit from more active stock trading despite the planned tax cut.
The Cabinet said it would seek approval from the legislature to lower the levy from the current 0.3 percent to 0.15 percent for six months to revitalize the market. This measure is expected to cost the national treasury NT$30 billion.
“It is not fair to brand the tax cut plan a failure,” Vice Minister of Finance Chang Sheng-ho (張盛和) told reporters. “Let’s wait a little longer before passing judgment.”
“Investors must have confidence in the economy, which remains fundamentally sound despite the global slowdown,” he said.
Chang blamed foreign institutional investors for the stock market slump, saying they had been pulling funds from the local bourse and other major Asian markets to take advantage of the US dollar’s rise to cash in their holdings.
Foreign fund managers sold about NT$11.06 billion in local shares, Taiwan Stock Exchange data showed.
Market analysts disagreed with Chang.
Alan Tseng (曾炎裕), an analyst at Capital Securities Corp (群益證券), said the planned tax cut would have little impact on the stock market and that foreign institutional investors would go ahead and sell even if the government scrapped the levy altogether.
“The tax cut will prove futile,” Tseng said by telephone. “Foreign investors will favor the US currency over equity as long as the financial market remains weak and the greenback keeps advancing.”
If the trend persists, Tseng predicted that the TAIEX would trend further downward unless the government intervened to halt the decline of the local currency, which closed at NT$32.04 against the greenback yesterday — its lowest in seven months.
Winson Wang (王榮旭), an analyst at Marbo Securities Consultant Co (萬寶證券投顧), said the tax cut came too late and in a wavering manner.
Wang said the government had been wishy-washy about the tax cut before reaching a decision on Wednesday night, deepening the impression it was at a loss about how to fix the economy.
“The government’s lack of resolution in the decision-making process served to diminish its effort to restore investor confidence,” Wang said in a telephone interview.
Also See: NT dollar drops to seven-month low on outflows
and Also See: Dun & Bradstreet report misleading, FSC chairman says
MORE VISITORS: The Tourism Administration said that it is seeing positive prospects in its efforts to expand the tourism market in North America and Europe Taiwan has been ranked as the cheapest place in the world to travel to this year, based on a list recommended by NerdWallet. The San Francisco-based personal finance company said that Taiwan topped the list of 16 nations it chose for budget travelers because US tourists do not need visas and travelers can easily have a good meal for less than US$10. A bus ride in Taipei costs just under US$0.50, while subway rides start at US$0.60, the firm said, adding that public transportation in Taiwan is easy to navigate. The firm also called Taiwan a “food lover’s paradise,” citing inexpensive breakfast stalls
TRADE: A mandatory declaration of origin for manufactured goods bound for the US is to take effect on May 7 to block China from exploiting Taiwan’s trade channels All products manufactured in Taiwan and exported to the US must include a signed declaration of origin starting on May 7, the Bureau of Foreign Trade announced yesterday. US President Donald Trump on April 2 imposed a 32 percent tariff on imports from Taiwan, but one week later announced a 90-day pause on its implementation. However, a universal 10 percent tariff was immediately applied to most imports from around the world. On April 12, the Trump administration further exempted computers, smartphones and semiconductors from the new tariffs. In response, President William Lai’s (賴清德) administration has introduced a series of countermeasures to support affected
CROSS-STRAIT: The vast majority of Taiwanese support maintaining the ‘status quo,’ while concern is rising about Beijing’s influence operations More than eight out of 10 Taiwanese reject Beijing’s “one country, two systems” framework for cross-strait relations, according to a survey released by the Mainland Affairs Council (MAC) on Thursday. The MAC’s latest quarterly survey found that 84.4 percent of respondents opposed Beijing’s “one country, two systems” formula for handling cross-strait relations — a figure consistent with past polling. Over the past three years, opposition to the framework has remained high, ranging from a low of 83.6 percent in April 2023 to a peak of 89.6 percent in April last year. In the most recent poll, 82.5 percent also rejected China’s
PLUGGING HOLES: The amendments would bring the legislation in line with systems found in other countries such as Japan and the US, Legislator Chen Kuan-ting said Democratic Progressive Party (DPP) Legislator Chen Kuan-ting (陳冠廷) has proposed amending national security legislation amid a spate of espionage cases. Potential gaps in security vetting procedures for personnel with access to sensitive information prompted him to propose the amendments, which would introduce changes to Article 14 of the Classified National Security Information Protection Act (國家機密保護法), Chen said yesterday. The proposal, which aims to enhance interagency vetting procedures and reduce the risk of classified information leaks, would establish a comprehensive security clearance system in Taiwan, he said. The amendment would require character and loyalty checks for civil servants and intelligence personnel prior to
RSS