Legislature approves extension of stock day-trading tax cut until 2027

Taipei, Dec. 31 (CNA) Taiwan's Legislative Yuan has passed a measure that will extend a reduced transaction tax on stock trades for day traders to 2027, which a trade association said would help maintain a high level of market activity.

The amendment to the Securities Transaction Tax Act, passed by lawmakers across party lines on Tuesday, meant the preferential 0.15 percent transaction tax rate for investors who buy and sell the same stocks in the same session will be maintained.

The lower rate, which has been in place since April 2017 but was set to expire on Dec. 31, 2024, is half the normal transaction tax rate of 0.30 percent, and was originally adopted to drum up trading volume on Taiwan's stock markets.

Kuomintang lawmaker Lai Shyh-bao (賴士葆), who introduced a proposed amendment to the Act, said the lower tax on day trading has had a positive effect on stock market activity and tax revenue, and it was therefore worth extending it.

The amendment still needs to be signed by the president, usually just a formality, and then promulgated before it takes effect.

Following passage of the amendment, the Taiwan Securities Association said the transaction rate tax cut would continue to benefit market activity given that day trading currently accounts for about 40 percent of total market turnover in Taiwan.