Amendments to two tax laws approved last week by the Legislature are expected to increase the government's annual tax revenue by NT$64.1 billion (US$2.1 billion), Premier Jiang Yi-huah said at a Cabinet meeting today.
The new rules will also reduce the amount of taxable income for salaried workers, low-to-middle income earners, and families in special circumstances by increasing the standard deduction, special deduction of income from salaries and wages, and special deduction for the disabled. More than 6.4 million people are expected to benefit from this change.
The amendments to the Income Tax Act and the Value-added and Non-value-added Business Tax Act, proposed by the Ministry of Finance (MOF) as part of an initiative to restore the nation's fiscal health, cleared the Legislature after the third reading on May 16. Premier Jiang thanked the president and vice president of the Legislative Yuan as well as ruling and opposition caucuses for their help in passing the revisions.
The additional tax revenue will inject much needed funds into the state coffers, Jiang said, but citizens will be paying close attention to how this new financial resource is spent. With preparations for the 2015 central government budget underway, agencies should look closely at each line of expenditure and make sure every dollar of this hard-to-come-by revenue is put to good use.
The MOF said the two amendments are important short-term adjustments to the taxation system that will improve the fiscal health of the nation. The MOF described it as a "feedback tax" system where a few industries and high-income earners give more back to society. In addition to promoting fairer distribution of income, the new system will also augment the nation's treasuries.