Taiwan Re-evaluates Capital Gains Tax
May 9, 2013 Taxation in Taiwan
TAIPEI – Taiwan’s investment landscape could soon face an overhaul, as the government looks at revising a tax which has been blamed for slowing down stock investments on the local market.
In a radio interview on May 8th the President of Taiwan Ma Ying-jeou announced that the government will soon appoint a new task force to evaluate the performance and market effects of the country’s controversial tax on capital gains earned from stock transactions.
The capital gains tax was introduced in 2012, but will not come into effect until the Taiwan Stock Exchange reaches 8 500 points, while currently the market is sitting at approximately 8 265, the highest level since August 2011.
Recently conducted surveys show that the tax is a highly controversial measure, with approximately 67 percent of the public calling on the government to scrap the measure.
Some local tax specialists are claiming that the tax has driven a large number of investors to take their money out of the local equity markets and reinvest overseas or on the local property market.
Despite the public opposition to the tax the Finance Minister of Taiwan Chang Sheng-ford came forward in support of the measure, saying that if the government appointed task force finds that the tax is flawed, then measures should be taken to fix the system instead of discarding the tax outright.
Explaining the decision to review the tax, the President conceded that there has been a slow down of activity on the local stock market, and he added that the tax may have played a part in the decline, however, he maintained that the measure is unlikely to be the sole reason behind the drop, and said that a more thorough review needs to be conducted in order to ascertain the reasons.
Photo by g0dd4mn[LZW]