TAIPEI - After the entire Cabinet submitted its resignation in the wake of the Kuomintang's (KMT) election debacle, it is possible that controversial legislation under review by the Legislature will be repealed.
One such law is the "big investor clause" of the Securities Gains Tax. The clause, which is set to take effect next year, stipulates that an additional 0.1-per cent tax rate be levied on any portion of trading that exceeds NT$1 billion (S$42 million).
Another controversial tax adjustment is the "housing and land integration tax." It aims to combine both housing and land values when calculating capital gains in a real estate transaction. The new measure is likely to raise tax payments.
After announcing their resignations, Finance Minister Chang Sheng-ford and Financial Supervisory Commission (FSC) Chairman Tseng Ming-chung will not attend this week's Legislative session to review the "big investor clause."
In line with public opinion, Chang said recently that he will not push for the "housing and land integration tax" if people think it's not beneficial.
Lawmakers to Propose 'more active actions'
Lawmakers are already weighing whether to repeal the "big investor clause." KMT lawmaker Lo Ming-tsai said yesterday that he will talk with fellow lawmakers to propose "more active actions" in order to revive Taiwan's capital market.
Changes are required to reverse "polices with a 9-per cent approval rating," Lo said, adding that he does not exclude the possibility of repealing the "big investor clause" outright, which, according to him, "may not be able to collect any tax in the future."
While the proposed clause may generate NT$900 million in tax revenue, it will also contribute to lower transactions, resulting in a drop of NT$40-50 billion in transaction tax, Lo said.
Besides the big investor clause, there are other regulations that deserve further review, Lo said.
New FSC Chairman to Review Laws: Tseng
The incumbent Cabinet has adopted a "defence mode" for the time being That is, they won't roll out any more major policies during their tenure and will focus their efforts on carrying out existing policies. FSC Chairman Tseng said his first priority is to maintain the stability of the nation's finance and ensure stable economic growth.
With Tseng's resignation, there is now uncertainty about legislation put forward by the FSC that covers electronic payments, banking practices and finance consumer rights.
When answering questions from the press, Tseng said that the regulations have obtained the Executive Yuan's approval and are now under review in the Legislative Yuan. The review process may continue once the new Cabinet is in place, he said.