The Cabinet and ruling Kuomintang legislators on Thursday came up with a revised version of their dual-track plan for stock gains tax, after an earlier version was criticized by the public as "leaning toward the rich."
The latest version sets Dec. 31, 2016 as the sunset date for the proposed system, which would offer individual stock investors the option of paying a stock transaction tax of between 0.02 percent and 0.06 percent in place of a capital gains tax.
From 2017, all taxpayers will be required to separately report stock gains or losses on their personal income tax returns, and their gains will be taxed at the applicable progressive income tax rate.
In the revised version, shareholders who own more than a 3 percent stake in a listed or over-the-counter company and individuals who make over NT$5 million a year will not be eligible to chose a stock transaction tax in place of a capital gains tax.
Since the government began work on the capital gains tax two months ago, the plan has been changed six times based on public sentiments.
It seems the administration of President Ma Ying-jeou has so far not found the focus of its tax reform. The rich, who were seen as being treated too leniently, are suddenly being targeted for heavy battering. The government's swaying back and forth has seriously affected the sensitive stock market.
If Taiwan's society is not ready for the tax and the government is not sure whether to introduce the tax, it would be better to just stop and look before making any further moves. (Editorial abstract -- June 1, 2012)
(By Y.F. Low)