Taiwan's Legislative Yuan adopted legislation to halve the securities transaction tax rate on day trading activity from 0.3 percent to 0.15 percent.
The amendments to the Securities Transaction Tax Act are designed to improve the jurisdiction's attractiveness to investors and help Taiwan compete against other financial centers in the region, such as Hong Kong and Singapore.
A move to introduce a capital gains tax on share trading was scrapped at the end of 2015, due to concerns over a drop in trading.
It is planned that the tax cut will be in operation for one year and is expected to be in place by the end of the month. The tax cut may be extended, depending on whether it is effective in boosting trading activity.