The nation’s benchmark index rose the most in five months yesterday after investors welcomed a capital gains tax plan on securities investments proposed by the Chinese Nationalist Party (KMT) legislative caucus, believing the proposal may allow them to pay less tax on stock investment gains than an earlier proposal put forward by the Cabinet.
The TAIEX climbed 0.65 percent at the start of trading on news that the KMT caucus on Monday finalized its own version of a proposal on the capital gains tax on securities investments, analysts said.
The index moved further higher at about noon on news that Minister of Finance Christina Liu (劉憶如) had offered to resign because of substantial differences in the Cabinet’s tax proposal and the KMT proposal, they said.
Photo: Mandy Cheng, AFP
At the end of trading, the TAIEX was 2.89 percent higher at 7,342.29, with turnover increasing to NT$93.09 billion (US$3.14 billion) from NT$44.17 billion in the previous session, the lowest since Jan. 19, 2009, stock exchange data showed. As of Monday, the TAIEX had tumbled 11.22 percent since March 28, when Liu unveiled the Cabinet-backed proposal, data showed.
Under the KMT caucus’ proposal, individual investors would be given the choice of either paying a predetermined tax on the value of trades when the TAIEX rises above 8,500 points, or reporting their gains (or losses) on the stock market with the rest of their income on their annual tax returns.
Pundits said the KMT’s proposal would have the least impact on the bourse, given the rarity of the TAIEX staying above the 8,500-point mark in the past two decades.
“The KMT’s bill on the capital gains tax is not ideal, but acceptable compared with other proposals,” said Lawrence Chang (張平沼), chairman of the General Chamber of Commerce of the Republic of China (中華民國全國商業總會).
Chang said the KMT caucus’ bill would essentially maintain the status quo as the TAIEX is unlikely to break the taxable threshold in the foreseeable future with Europe’s debt crisis escalating.
Investors with exposure to local shares could become more profitable and would be willing to contribute more to the state coffers as the TAIEX approaches the taxable limit, he said.
Capital Securities Corp (群益證券) analyst Alan Tseng (曾炎裕) said the market reacted positively to the KMT caucus’ plan as evidenced by the main bourse’s 2.89 percent gain coupled with the large turnover, a rare phenomenon of late. However, he said the taxable threshold may set an upside limit for the TAIEX, but investors by and large do not look that far into the future.
Chang Shu-hui (張淑蕙), a fund manager at Prudential Financial Securities Investment Trust Enterprise Co (保德信投信) forecast that the benchmark index would move within a narrow range of 6,800 to 7,600 in the short term, ahead of Greece’s new general election on June 17.
This story has been updated since it was first published.
NEXT GENERATION: The four plants in the Central Taiwan Science Park, designated Fab 25, would consist of four 1.4-nanometer wafer manufacturing plants, TSMC said Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) plans to begin construction of four new plants later this year, with the aim to officially launch production of 2-nanometer semiconductor wafers by late 2028, Central Taiwan Science Park Bureau director-general Hsu Maw-shin (許茂新) said. Hsu made the announcement at an event on Friday evening celebrating the Central Taiwan Science Park’s 22nd anniversary. The second phase of the park’s expansion would commence with the initial construction of water detention ponds and other structures aimed at soil and water conservation, Hsu said. TSMC has officially leased the land, with the Central Taiwan Science Park having handed over the
AUKUS: The Australian Ambassador to the US said his country is working with the Pentagon and he is confident that submarine issues will be resolved Australian Ambassador to the US Kevin Rudd on Friday said that if Taiwan were to fall to China’s occupation, it would unleash China’s military capacities and capabilities more broadly. He also said his country is working with the Pentagon on the US Department of Defense’s review of the AUKUS submarine project and is confident that all issues raised will be resolved. Rudd, who served as Australian prime minister from 2007 to 2010 and for three months in 2013, made the remarks at the Aspen Security Forum in Colorado and stressed the longstanding US-Australia alliance and his close relationship with the US Undersecretary
‘WORLD WAR III’: Republican Representative Marjorie Taylor Greene said the aid would inflame tensions, but her amendment was rejected 421 votes against six The US House of Representatives on Friday passed the Department of Defense Appropriations Act for fiscal 2026, which includes US$500 million for Taiwan. The bill, which totals US$831.5 billion in discretionary spending, passed in a 221-209 vote. According to the bill, the funds for Taiwan would be administered by the US Defense Security Cooperation Agency and would remain available through Sept. 30, 2027, for the Taiwan Security Cooperation Initiative. The legislation authorizes the US Secretary of Defense, with the agreement of the US Secretary of State, to use the funds to assist Taiwan in procuring defense articles and services, and military training. Republican Representative
TAIWAN IS TAIWAN: US Representative Tom Tiffany said the amendment was not controversial, as ‘Taiwan is not — nor has it ever been — part of Communist China’ The US House of Representatives on Friday passed an amendment banning the US Department of Defense from creating, buying or displaying any map that shows Taiwan as part of the People’s Republic of China (PRC). The “Honest Maps” amendment was approved in a voice vote on Friday as part of the Department of Defense Appropriations Act for the 2026 fiscal year. The amendment prohibits using any funds from the act to create, buy or display maps that show Taiwan, Kinmen, Matsu, Penghu, Wuciou (烏坵), Green Island (綠島) or Orchid Island (Lanyu, 蘭嶼) as part of the PRC. The act includes US$831.5 billion in
RSS