(Bloomberg) -- Taiwan lawmakers agreed to extend a tax cut for day trading for another three years on the last session before the measure was set to expire.
Legislators in Taipei voted to renew the reduction of the transaction tax to 0.15% from 0.3%, ensuring the measure first introduced in 2017 will now stay in place until the end of 2027. The tax cut has been credited with helping to boost turnover in the island’s $2.5 trillion stock market, the world’s 10th biggest by value.
The protracted struggle to extend the measure, which enjoys widespread support, was largely due to the wrangling in parliament between the party of President Lai Ching-te and the opposition parties which hold a narrow majority. There have been a number of clashes between the two sides in the past month over issues such as the budget and the appointment of new judges.
Finance Minister Chuang Tsui-yun had urged lawmakers to vote for another extension, warning a failure to do so would risk complicating revenue collection and hurting market sentiment. The Financial Supervisory Commission said stock trading volumes may shrink by 30% if the tax cut wasn’t renewed by another three years, according to the Economic Daily News.
Day trading accounted for about one-fifth of trading volumes in Taiwan and around 40% of value last week, according to stock exchange data.
The benchmark Taiex index closed 0.7% lower Tuesday, paring an earlier decline of as much as 0.9%. The gauge gained 28% this year, the biggest annual return since 2009.
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