The Cabinet approved a plan Thursday to impose a capital gains tax on stock investments but decided to not to submit the bill yet to the Legislative Yuan, saying it needs time to sort out its differences with legislators over the bill.
This is an indication that the Cabinet has begun to waver in its determination to push for tax reform, which is disappointing.
As a result of the delay, the bill is unlikely to clear the legislative floor until November. In other words, the capital gains tax will remain an uncertainty in the stock market until the end of the year, as the struggle over the issue continues among different government agencies, the executive and legislative branches, and supporters and opponents of the tax in the private sector.
Brokerage firms have threatened to stage a demonstration May 20 to protest against the new tax, while several civic groups have said they will mobilize salaried workers to take to the streets to express their anger over the existing tax system, which has been criticized as favoring the rich.
We can see that delaying the bill will only allow its supporters and opponents to expand their mobilization and gather even greater momentum, which will cause greater volatility in society and the stock market. Passing the bill soon is the only way to allow society and the stock market to quickly return to normal.
Any reforms will inevitably draw resistance from people with vested interests. The government should work to overcome such resistance and not yield to it. It must not forget the silent majority, who are eager for fairness in the tax system and for a more equitable distribution of wealth.
It is time for President Ma Ying-jeou to come out and declare his goal to promote tax fairness based on the ability-to-pay principle. He should coordinate among the executive and legislative branches so that a special legislative session can be held in June to pass the capital gains tax bill. (Editorial abstract -- April 28, 2012)
(By Y.F. Low)