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Commercial Times: Cabinet should withdraw capital gains tax plan

2012/05/31 14:11:41

Despite a dispute that has lasted for nearly two months, various relevant authorities have been unable to reach a consensus on a plan to impose a capital gains tax on stock investments. Instead, they are becoming increasingly divisive on the issue.

The Cabinet should withdraw a version of the plan it previously submitted to the Legislature and should allow the next finance minister to draft a new one.

Over the past month, the proposal by former Finance Minister Christina Liu has not only failed to convince the public, but legislators from the ruling Kuomintang have also abandoned her one after another, prompting her to resign as a result. The incident has impacted the credibility of President Ma Ying-jeou and the morale of his administration.

Working under a severe time constraint, the KMT legislative caucus presented earlier this week an integrated version of the plan that combines different ideas put forth by its legislators.

This version, which would offer the option of paying a stock transaction tax of between 0.02 percent and 0.06 percent in place of a capital gains tax, is realistic.

It is not, however, in line with the principles of fairness, justice and taxing people according to their ability to pay.

Instead of pushing through the plan in a hurry, the Cabinet should retract it for further consideration and allow the dispute to gradually calm down. (Editorial abstract -- May 31, 2012)

(By Y.F. Low)