The Cabinet's version of a bill to introduce a capital gains tax on stock investments passed its first reading in the Legislative Yuan last week.
Despite resistance from brokerage firms and big investors, dissent within the ruling Kuomintang over the bill has temporarily ceased after President Ma Ying-jeou reaffirmed his determination to promote the tax.
Some people in Taiwan are having doubts about the proposed tax out of concern that it could destabilize the local bourse and even shrink the capital market. Such fears are unjustified, given that major countries around the world are also taxing stock gains, which has not hampered the development of their stock markets.
The best way to lead the stock market back to normal is to finalize the tax plan to remove the market uncertainty. We hope legislators will reach common ground and hammer out a version of the bill that is acceptable to all sides.
With President Ma Ying-jeou having declared the stock gains tax to be an important policy of his administration, the Cabinet should do its utmost to achieve his goal. Ma needs to coordinate among the different government agencies, officials and legislators to ensure the early passage of the bill. (Editorial abstract -- May 15, 2012)
(By Y.F. Low)