Taiwan News, Staff Writer
2012-05-26 04:23 PM
Chen and Finance Minister Christina Liu attended a dinner with the leaders of some of Taiwan’s top business associations Friday night.
President Ma Ying-jeou has presented the capital gains tax as a way of reducing the growing gap between the rich and the poor in Taiwan, but he has encountered opposition from the business world and from within his own party, the Kuomintang. Critics have also condemned the timing of the tax proposal, coming as Taiwan is facing a falling stock market amid the fallout from the European debt crisis.
Liu said she would not have proposed the tax at the time she did if she had known that the government would come up with electricity and oil price hikes shortly after, reports said Saturday.
She launched the tax on March 28 but read in the press about the energy price hikes on April 5, reports said. Strong protests and plummeting popularity rates later led Ma to postpone the electricity rate increase to June and spread it over three stages.
After Friday’s dinner, Chen told reporters that he had reached a consensus with the business leaders in four areas. They agreed that the government understood each proposal from the business associations and that it would take them into consideration, he said. Government and business groups also agreed that it was better for society at large that the introduction of the capital gains tax would not suffer any further delays. Finally, they also agreed that more attention needed to be paid to the global economic situation because it could affect Taiwan’s stock market performance.
The Legislative Yuan is expected to begin discussion of several capital gains tax proposals on June 4, but since the current session has only been extended until June 15, lawmakers have said the tax is unlikely to be approved before the summer. The government, KMT lawmaker Lai Shyh-bao and People First Party legislator Thomas Lee each have a version under consideration, but the main opposition Democratic Progressive Party and the smaller Taiwan Solidarity Union still have to file theirs.
Chen said it was up to the Legislative Yuan to decide whether it would return out of summer recess and call a special session to discuss the capital gains tax.
Chinese National Federation of Industries Chairman Rock Hsu said the business leaders had told Chen and Liu about their different views on the tax idea.
Meanwhile, KMT legislators were reportedly trying to work out a consensus on how to combine the various proposals now before the Legislature’s Finance Committee. At present, the Cabinet version proposes a tax rate from 15 percent to 20 percent for stock income beginning from NT$4 million (US$135,000) a year. Lai’s version has a 20 percent tax rate and NT$3 million (US$101,000), while Alex Tsai proposes 10 percent and NT$6 million (US$202,000). Other versions are based on completely different considerations, reports said.