Tax cut on day trading extended until end of 2021

2018/04/13 17:26:38 fontsize-small fontsize-default fontsize-big
Tax cut on day trading extended until end of 2021

Taipei, April 13 (CNA) The Legislature passed an amendment to the Securities Transaction Tax Act on Friday that extends the duration of a previously implemented tax cut on day trading transactions until the end of 2021.

The amendment extends a cut in the transaction tax for day trading from 0.3 percent to 0.15 percent for a one year period, implemented in April last year, by three years and eight months, with the tax cut now scheduled to end on Dec. 31, 2021.

Kuomintang (KMT) lawmaker Tseng Ming-chung (曾銘宗), who previously served as chairman of Taiwan's Financial Supervisory Commission, proposed the extension earlier this year.

Tseng, who in his capacity as FSC chairman, relaxed trading rules in 2014 to permit day trading, whereby traders can buy first and sell later or sell first and buy later in a single session, is a firm supporter of the practice.

Day trading has three functions: promoting investment and speculation while avoiding risk, he noted.

In order to further promote day trading, which currently accounts for 20 percent of trading in Taiwan, Tseng proposed a five-year extension to the tax cut after seeing how it has boosted trading volume in the year since it was introduced.

A three year and eight month-extension was agreed on, following negotiations.

The FSC put out a statement once news that the amendment had been passed was reported, thanking the Legislature for its support and reiterating its optimism that the tax cut will further enhance the global competitiveness of Taiwan's stocks.

The extension of the tax cut will maintain the momentum of Taiwan's stock market while encouraging more businesses to go public and trade on the exchange, according to the commission.

This in turn will give the government more tax revenue despite the lower tax rate because of the increased volume in transactions, the FSC noted.

Since the implementation of the tax cut last April, the volume of day trading has increased from 10 percent of total trading to 20 percent, according to Tseng.

Responding to the news, Hua Nan Securities Investment Management Chairman David Chu (儲祥生) told CNA that this expected development is a move in the right direction.

The extended tax cut will benefit Taiwan's trading environment and boost the volume of financial trade in the country, Chu said.

(By Kuan-lin Liu, Fan Cheng-hsiang, Tsai Yi-chu and Jiang Ming-yan)

Enditem/AW


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