Taipei, July 23 (CNA) Finance Minister Chang Sheng-ford said Monday he hoped lawmakers pass the capital gains tax plan at the upcoming extraordinary legislative session, while opposition lawmakers urged the government to postpone reviewing the plan.
Chang said the tax plan backed by the ruling Kuomintang (KMT) was hammered out after careful consideration and delaying the review will only put uncertainty factors back into the stock market, which would drag down stock prices.
He said the government has waived long-term stock holders from the tax and raised the tax threshold compared with previous plans.
"It is the final plan, there will be no more changes to the plan," he said.
According to the "dual track, two stage" proposal supported by the KMT, in 2013 and 2014, investors will pay a transaction tax of between 0.02 and 0.06 percent on stock trade only when the market's benchmark weighted index hits 8,500 points or higher.
Investors who have sold more than 10,000 initial public offering shares or over 100,000 shares in emerging stocks or unlisted companies will have to pay a 15 percent tax on capital gains, but they will get a 50 percent tax discount if they hold on to their shares for more than a year.
Starting from 2015, all investors will have to pay a 15 percent tax on their capital gains, while investors who sold shares worth NT$1 billion (US$33.3 million) in one year will face a 15 percent tax.
Lee Tung-hao, a caucus whip with the opposition People First Party, warned that if the KMT's proposal on the tax is passed, Taiwan will face the possibility of losing emerging industries to China.
Ker Chien-ming, a caucus whip with the opposition Democratic Progressive Party, said the KMT's version fails to address fairness and justice in taxation, adding that due to weakening global demand and the slowdown of the local economy, now is not the time to tax investors' capital gains.
The Alliance for Fairness in Taxation said the KMT's proposed version failed to address the "ability to pay" principle, and urged lawmakers to review the tax plan proposed by KMT Legislator Tseng Chu-wei instead.
Tseng's version states that investors who trade IPO stocks, general stocks and futures worth more than NT$100 million a year will be taxed on their capital gains, which the alliance said can more accurately address the "ability to pay" principle.
Wang Jung-chang, convener of the Alliance for Fair Tax Reform, said he hoped "a miracle" will ensure that KMT's capital gains tax bill will not be passed at the extraordinary legislative session, which is scheduled July 24-27.
(By Sherry Tang, Wen Kuei-hsiang, Eva Feng, Ann Chen)