The Impact of the Capital Gain Tax Retaxation on the Stock Retrun of the Financial Industry in 2012

• Main Authors: Liang, Chien Chou, 梁劍洲
• Other Authors: Hsu, Yen Shan
• Format: Others
• Language: zh-TW
• Online Access: http://ndltd.ncl.edu.tw/handle/51900946626597445645

碩士 === 國立政治大學 === 財務管理研究所 === 101 === The Ministry of Finance held a press conference on April 12 2012, declaring the possibility of Capital Gains Tax (CGT) retaxation, and releasing the draft of "Income Tax Act " and " Income Basic Tax Act ". This is the biggest tax reform proposal over the past 25 years, and makes a considerable market impact. In this paper uses event study with multiple legislation event windows to examine whether the CGT retaxation would affect the cumulative abnormal returns (CAR) of the 42 listed companies on Taiwan Stock Exchange (TSE) and Over The Counter (OTC), and also establishes the regression model to analyze the relations between CAR and four variables: dividend yield, capital gains to revenues ratio, financial assets to total assests ratio, and brokerage business fees to revenues ratio. The findings of this thesis are as follow: 1. The Ministry of Finance edition is the most demanding version and causes financial stocks in the second trading day to have a quite significant negative CAR. 2. Executive Yuan revised the CGT reform proposal from Ministry of Finance in the direction toward liberal version, which also the version caters to the market. Therefore, the financial stocks have remained fairly significant positive CAR in this window. 3. Legislative Yuan passed version in the most liberal version, however market still have to face the retaxzation after all. Therefore, the financial stocks perform a significant positive CAR at first, but start to decrease after 2nd trading days. 4. Dividend paying company would enjoy a positive CAR relative to non-dividend paying company. This result is in line with the majority of the literatures. However, this paper didn’t find significant relationship between CAR and the level of payment. 5. The empirical results indicate that the higher of the capital gains to revenues ratio, the lower of the CAR on financial stocks. 6. This paper didn’t find strong or significant relationships between financial assets to total assests ratio, brokerage business fees to revenues ratio and CAR.