Taiwanese stocks slumped to a two-month low and the currency weakened after the chairman of the stock exchange said the island will probably impose a capital-gains tax on share transactions.
The benchmark Taiex Index sank 1.6 per cent to 7,639.82 at the close of trading in Taipei, the lowest level since February 1. Taiwan's currency weakened 0.1 per cent to 29.519 New Taiwanese dollars per dollar.
There's a "99 per cent" chance that Taiwan will introduce the tax to address social inequalities and to raise revenues, Schive Chi, chairman of Taiwan Stock Exchange Corp., said on April 3. The Taiex has slumped 5 per cent since the Economic Daily reported on March 29 that the government was evaluating the proposal. Overseas investors will be exempt from the tax, Finance Minister Christina Liu said yesterday after markets shut.