Minister of Finance Christina Liu (劉憶如) offered to resign yesterday after a capital gains tax she enthusiastically proposed was rejected by Chinese Nationalist Party (KMT) lawmakers at a meeting on Monday.
After meeting with Premier Sean Chen (陳冲) yesterday evening, she reiterated her intention to resign, but added that she would wait until the Executive Yuan finds a successor.
At 10:42pm, Executive Yuan spokesperson Hu Yu-wei (胡幼偉) told the press that Chen had not approved Liu’s resignation.
Photo: Fang Pin-chao, Taipei Times
During their brief meeting, Chen told Liu that he wanted her to continue to work on a proposal, merging the Executive Yuan’s version of the capital gains tax on securities transactions and the KMT lawmakers’ version, that would be acceptable to the KMT caucus, Hu said.
Hu quoted Chen as saying that Liu’s resignation was not an issue that needed to be discussed for the moment, adding that Chen put off the question of whether Liu should stay in the Cabinet or leave until after the tax issue is resolved.
Liu said in a statement yesterday afternoon that she had tendered her resignation to Chen due to a disagreement with a new version of the draft bill of a capital gains tax being proposed by KMT lawmakers.
“The [KMT] caucus has been making efforts in integrating a version of the proposal that could be accepted by most people,” Liu said. “However, this version did not meet with my own beliefs.”
The KMT caucus proposal was far from meeting her expectations of the ability-to-pay principle, because major earners in the stock market would not be required to pay a capital gains tax under this version, she said.
However, this did not mean the government has given up on its tax reform efforts, Liu said, adding she still hopes the integrated tax bill will be passed by the legislature as soon as possible so a new system for the securities capital gains tax could be launched.
Her offer of resignation came as a shock to the premier.
According to Hu, Chen learned the news at “about noon” when he was pre-occupied with other events outside the Executive Yuan and that Liu’s resignation letter, in a sealed envelope, had been delivered to Chen’s office at 11am.
At about 3:20pm, Hu told a press conference that Chen wanted to meet with Liu to “thoroughly exchange views about the two proposals.”
Chen did not believe that Liu would need to resign just because her proposed version of the tax bill was not accepted by KMT lawmakers, since “the issue was just part of the ministry’s work,” Hu said.
KMT lawmakers were also shocked by the news.
KMT Legislator Lin Hung-chih (林鴻池) said he was surprised to learn that Liu had offered to resign.
“I didn’t see signs of her opposing the revised proposal,” Lin said.
KMT Legislator Alex Fai (費鴻泰) said he was also shocked because some of the revisions were made based on her views.
“I don’t understand why what was fine with her yesterday wasn’t fine today,” Fai said.
Meanwhile, Democratic Progressive Party (DPP) caucus convener Ker Chien-ming (柯建銘) said: “It’s inevitable for Liu to resign because her policy was rejected by her own party.”
The KMT caucus’ objection to the Executive Yuan’s proposal was like a slap in the face to Liu and the administration, Ker said.
The flip-flopping on policy also reflected a serious lack of communication and integration between the Presidential Office, the Executive Yuan and KMT lawmakers, he said.
While Liu tendered her resignation to defend her proposal, President Ma Ying-jeou (馬英九) should offer an explanation on the issue, since Ma was the one who approved the proposal in the first place, DPP Legislator Pan Men-an (潘孟安) said, adding that the feud between the administration and the KMT caucus was a “de facto constitutional crisis.”
DPP Legislator Kuan Bi-ling (管碧玲) said Liu was hard-nosed in defending her own policy, while colleague Lee Ying-yuan (李應元) said Ma and Chen were the ones to be held accountable for the swirling controversy and instability.
However, DPP Legislator Hsueh Ling (薛凌) said Liu only had herself to blame in excluding foreign investors from the tax base and the failure to clearly explain the administrative costs and calculation of the proposed capital gains tax, which worsened the situation.
Taiwan Solidarity Union Legislator Lin Shih-chia (林世嘉) said her caucus would initiate a motion for the resignation of the entire Cabinet today.
People First Party (PFP) caucus whip Thomas Lee (李桐豪) said his caucus respected Liu’s decision, but maintained the amendments related to the capital gains tax should be withheld until further discussion.
This story has been updated since it was first published.
CIVIL DEFENSE: More reservists in alternative service would help establish a sound civil defense system for use in wartime and during natural disasters, Kuma Academy’s CEO said While a total of 120,000 reservists are expected to be called up for alternative reserve drills this year, compared with the 6,505 drilled last year, the number has been revised to 58,000 due to a postponed training date, Deputy Minster of the Interior Ma Shih-yuan (馬士元) said. In principle, the ministry still aims to call up 120,000 reservists for alternative reserve drills next year, he said, but the actual number would not be decided later until after this year’s evaluation. The increase follows a Legislative Yuan request that the Ministry of the Interior address low recruitment rates, which it made while reviewing
DETERRENCE: Along with US$500 million in military aid and up to US$2 billion in loans and loan guarantees, the bill would allocate US$400 million to countering PRC influence The US House of Representatives on Friday approved an appropriations bill for fiscal year 2025 that includes US$500 million in military aid for Taiwan. The legislation, which authorizes funding for the US Department of State, US foreign operations and related programs for next year, passed 212-200 in the Republican-led House. The bill stipulates that the US would provide no less than US$500 million in foreign military financing for Taiwan to enhance deterrence across the Taiwan Strait, and offer Taipei up to US$2 billion in loans and loan guarantees for the same purpose. The funding would be made available under the US’ Foreign Military
WARNING: China has stepped up harassment of foreign vessels after its new regulation took effect last month, an official said, citing an incident in the Diaoyutai Islands The Coast Guard Administration (CGA) yesterday linked China’s seizure of a Taiwanese fishing vessel illegally operating in its territorial waters to Beijing’s new regulation authorizing the China Coast Guard to seize boats in waters it claims. Chinese officials boarded and then seized a Taiwanese fishing vessel operating near China’s coast close to Kinmen County late on Tuesday and took it to a Chinese port, the CGA said. The Penghu-registered squid fishing vessel Da Jin Man No. 88 (大進滿88) was boarded and seized by China Coast Guard east-northeast of Liaoluo Bay (料羅灣), 17.5 nautical miles (32.4km) from Taiwan’s restricted waters off Kinmen,
As eight basketball-playing international students appealed to the Taiwanese basketball industry after they were excluded from the draft of an upcoming new league merging the P.League+ and the T1 League, the new league’s preparatory committee spokesperson Chang Shu-jen (張樹人) yesterday said the committee would tomorrow discuss the supplementary measures and whether the international students can join the draft. The students on Tuesday called for support on their right to play in the upcoming new league, after a merger involving the two leagues impacted their eligibility for the draft. The international players from the University Basketball Association (UBA), led by first pick prospect