| Summary: | 碩士 === 東吳大學 === 會計學系 === 93 === Capital gains on security have been exempted from the income tax to promote the economic development in Taiwan. On the other hand, the reason for the tax-exempt on land capital gain is to avoid double taxation, because the capital gain has been levied the land value increment tax. However, tax equity has been undermined in that many companies take advantages of the two tax-exempt items to evade taxes via security and land transactions. Therefore, how to reform the income tax law to prevent tax evasion is an important issue to be clarified.
This study employs the questionnaires to collect the opinions from taxpayers without stock and land assets, taxpayers having stock and land assets, CPAs and tax officials. We analyze their opinions about the tax avoidance by security and land transactions, the impact of tax-exempt security and land capital gains on tax equity, and the direction of income tax law to be reformed. Our results show that the exemption on security and land capital gains result in tax avoidance and violate the equity principle. Besides, taxpayers having stock and land assets tend to be less supportive of imposing taxes on stock and land capital gains in the future while the other groups tend to favor restoring taxation on stocks and land capital gains.
The main suggestions of future tax reforms on security and land capital gains are as follows:
1.Security capital gains: First of all, in the short-term, tax policy-makers may have different tax treatment for listed & OTC stocks and stocks of private companies. Then, all stock capital gains shall be taxed and should be combined with other incomes under a progressive tax rate in conformity with the ability to pay principle. Thirdly, in the long run, the goal is to repeal the securities transactions tax, and only levy security capital gain tax.
2.Land capital gains: First of all, our respondents suggest the government to levy land capital gains based on actual transaction value, rather than the government-announced value. Secondly, in taxing the land capital gain, the land value increment tax may be deductible from the income taxes on land capital gains, with the limitation of the paid land value increment tax. When the tax revenues from land capital gain become stable, the land value increment tax may be repealed. Thirdly, to prevent the short-term speculation on land transactions, the holding period of the land should be considered while land capital gains are calculated. Therefore, landowners who hold the land longer can enjoy the preferential tax treatment. Finally, when a landowner sells his/her land and purchases another land within two years’ period, the landowner could be refunded the land capital gain taxes paid on the previously sold.
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