Christina Y. Liu, ROC minister of finance, announced her resignation May 29 following a disagreement with the ruling Kuomintang party caucus over the proposed securities gains tax.
MOF-drafted revisions to the Income Tax Act, which were unveiled April 12, called for the capital gains tax to be introduced in 2014 with individual investors taxed 15 percent to 20 percent on annual securities gains over NT$4 million (US$135,560).
The bill triggered heated debate islandwide, resulting in market instability and weak trading on the local bourse.
The KMT party caucus moved to restore investor confidence May 28 by introducing a fundamentally different bill that proposed levying a securities gains tax in the form of additional transaction taxes. These are set between 0.2 percent and 0.6 percent depending on the level of Taiwan’s benchmark TAIEX index.
“Under the KMT bill, those who make substantial profits from securities trading will not have to pay taxes on their capital gains,” Liu said. “I cannot agree with this bill as it runs counter to the MOF’s policy goal.”
According to Cabinet Spokesman Hu Yu-wei, ROC Premier Sean C. Chen has met with Liu but is yet to accept her resignation.
“The top priority is for the minister to continue negotiating with the Legislature and work toward arriving at a compromise based on the different bills,” Hu said.
Sources familiar with the matter claim Liu has agreed to stay in her post until a replacement is found. (JSM)
Write to Meg Chang at sfchang@mail.mofa.gov.tw