TAIPEI: Finance Minister Chang Sheng-ford said Wednesday that he sees no need to raise the taxation threshold for a capital gains tax targeting major players in the local stock market.
Chang told lawmakers that the current low turnover in the local market reflects weak confidence in the market and fears over volatility in global equity markets but has nothing to do with the tax aimed at traders of NT$1 billion (US$31.45 million) and up each year.
His comments came after lawmakers’ suggestions that the government raise the threshold to NT$1.5 billion to encourage trading.
Chang noted that turnover on the main board of the local stock exchange failed to expand significantly in Wednesday trading, even though the Legislative Yuan’s Finance Committee decided last week to postpone implementation of a capital gains tax on stock gains, and the Dow Jones Industrial Average breached 18,000 overnight for the first time ever.
The weighted index on the Taiwan Stock Exchange closed up 0.97 percent at the day’s high of 9,186.18, on turnover of NT$83.58 billion, lower than the average of NT$93 billion so far this year. Analysts said the thin turnover came as foreign institutional investors left for Christmas vacation.
Last week, the Legislative Yuan’s Finance Committee approved an amendment to postpone for three years the implementation of a looming capital gains tax on stock gains, which targets the biggest traders in the market, in a bid to encourage turnover. The bill is subject to approval from the full legislature floor.