Taiwan Today

In an interpellation session at the Legislative Yuan Oct. 13, Premier Wu Den-yih said the government does not have any imminent plans to reinstate a capital gains tax on equity investments. The Ministry of Finance also issued a statement on the evening of the same day saying that in the absence of a public consensus, the government would not “rashly” reinstate the capital gains tax. The premier’s remarks as well as the MOF’s statement were both in response to an Oct. 13 news report stating that when the Tax Reform Committee meets Oct. 16, the issue of reinstating the capital gains tax on stock investments will be on the agenda. According to the news report, a recently completed study, one commissioned by the TRC, recommends that the capital gains tax on equity investments be gradually reinstated against corporations though not against individuals. The news report caused the local stock market to plunge sharply during the morning trading session Oct. 13. Vice Premier Eric Liluan Chu will chair the Oct. 16 meeting, the first time he has presided over a TRC meeting since assuming his present position in September. Government officials, scholars and representatives from the business world will all be at the meeting as well. Other government officials also said Oct. 13 that since the topic of a capital gains tax is so controversial, it is highly unlikely that any decision will be reached during the Oct. 16 meeting. In his remarks to the Legislature the premier noted that the scholarly report was only a report: it has not been discussed by government officials, and is far from being implemented. The report’s recommendations have not even been forwarded to the MOF, not to mention the Executive Yuan, the premier said. In the MOF press release the ministry said that at the moment the government is only considering the possibility of reinstating the capital gains tax. Before the government makes up its mind on whether to reinstate the tax or not, many more discussions are needed, and these discussions will not be completed until the end of November. The statement also pointed that Article 7 of the Basic Income Tax Act includes minimum taxes on corporate securities gains and individual trades on unlisted stocks. “The tax system as it currently stands already adequately addresses the issue of how to tax gains made on stock investments,” the statement read. (HZW)