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Taiwanese Shares Climb Most in Five Months on KMT’s Tax Proposal

May 29, 2012

Taiwanese Shares Climb Most in Four Weeks on KMT’s Tax Proposal

The Taiex’s advance was the biggest among Asian benchmark indexes today. Photographer: Maurice Tsai/Bloomberg

Taiwan’s stocks rose the most in five months, after the ruling party proposed a taxation system that seeks to ease the burden on individual investors of a tax on trading gains.

The Taiex (TWSE) gained 2.9 percent to 7,342.29 as of the close in Taipei, the largest jump since Dec. 21, after the official Central News Agency reported the Kuomintang party is drafting a dual stock taxation system. Individual investors can choose to declare their capital gains through stock trading as a personal income tax, or substitute the capital-gains tax with a stock transaction tax to be adjusted according to stock market performance, the agency reported.

“Investors are obviously much happier with this proposal compared with the previous capital-gains tax plan,” Robyn Hsu, a fund manager at Capital Investment Trust, who helps to oversee about $6.7 billion, said by telephone in Taipei.

Under a plan that was approved by Cabinet on April 26, individuals who earn more than NT$4 million ($135,000) annually from trading will incur a tax of 15 percent to 20 percent. That proposal was itself a less rigorous plan after an earlier version helped drag the Taiex down as much as 12 percent since March 28, when a government panel held its first discussion on a capital-gains tax.

The Taiex’s advance was the biggest among Asian benchmark indexes today. Taiwan Semiconductor Manufacturing Co. (2330), the stock with the biggest representation on the gauge, increased 0.9 percent, while Hon Hai Precision Industry Co. (2317), the second-largest stock, climbed 4.8 percent.

Taiwan Finance Minister Christina Liu offered to resign today over conflicts with legislators from the ruling Kuomintang party on the proposed stock gains tax, according to a statement on the ministry’s website.

To contact the reporter on this story: Weiyi Lim in Singapore at wlim26@bloomberg.net

To contact the editor responsible for this story: Darren Boey at dboey@bloomberg.net


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