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Capital gains tax bill could clear Legislature next session: lawmaker

2012/04/28 20:23:31

Taipei, April 28 (CNA) A draft bill on taxing stock gains could clear the Legislature in the next session, a ruling Kuomintang (KMT) lawmaker said Saturday, but the main opposition Democratic Progressive Party (DPP) said the time is not right to talk about the tax.

Finance Minister Christina Liu will call on legislators across the party spectrum starting next week to solicit support for the tax bill, according to KMT Legislator Lin Hung-chih.

"After initial consensus is gained, the KMT legislative caucus will call a meeting and invite Minister Liu to give a report in the Legislature," Lin said.

"The draft amendment to the tax code is unlikely to be passed this session, but should clear the Legislature in the next session, (which will open in September)," he said.

The Cabinet approved a series of draft amendments to income tax law Thursday, to allow a capital gains tax on securities investors.

Under the draft plan, individual securities investors who make more than NT$4 million (US$136,360) in annual net gains will be taxed at rate of between 15 percent and 20 percent.

For institutional investors, the tax threshold was lowered from NT$2 million to NT$500,000 and the rate was raised from 10 percent to 12 percent, according to the Cabinet's version of the bill.

Four KMT legislators have come up with different versions of the bill, while the DPP and the minor People First Party (PFP) have also drafted bills, which means there are seven versions so farto be put before the Legislature.

KMT Legislator Lai Shyh-bao said his version will allow long-term investors to halve their taxes, and the definition of “long-term” will be changed from three years to one year.

The tax rate will be cut to 10 percent, and the stock transaction rate will be lowered from 0.3 percent to 0.2 percent, Lai said.

However, the DPP legislative caucus said Saturday it is not the right time to be talking about a capital gains tax. Instead, the focus should be on freezing electricity rates to prevent an imminent hike from taking effect, the caucus said.

DPP legislative whip Ker Chien-ming said that the party has prepared its own version of the stock gains tax bill but thinks the government should get its priorities right.

"At present, surging consumer prices and inflation have made people's life miserable and a freeze of the planned electricity rate hikes should be the most important task," Ker said.

He suggested that the state-owned Taiwan Power Co. (Taipower) review its operational problems before moving to raise electricity rates from May 15, as planned.

Meanwhile, PFP legislative caucus convener Lee Tung-hao said the capital gains tax should be introduced in stages and his party will come up with a version of the tax bill to that effect next week.

(By Ho Meing-kuei, Wen Kuei-hsiang and Lilian Wu)
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