Economy

Ministry of Finance widens luxury tax net

This US$49,000 Versace Bubble Sofa could soon be subject to a 10-percent Taiwanese luxury tax. (Courtesy of New World Design Center)

• Publication Date：03/02/2011
• Source： Taiwan Today
• By  Meg Chang

Taiwan’s Ministry of Finance is mulling a series of revisions to its proposed luxury tax bill that will increase the effectiveness of the legislation in narrowing the wealth gap.

Unnamed MOF officials said March 1 that designer furniture and fur coats valued over NT$500,000 (US$16,860) are now covered by the bill. In addition, the government can set prices for luxury goods to thwart retailers from offering deep discounts to avoid taxation.

According to officials, the bill also includes a clause allowing the Cabinet to suspend the tax during an economic recession.

The MOF luxury tax, which was unveiled Feb. 25, seeks to impose an additional 10-percent tax on an array of items, including club memberships, motor vehicles, private jets and yachts.

MOF Deputy Minister Chang Sheng-ford said the initiative is expected to add NT$15 billion to the nation’s coffers, with the additional revenue allocated to social welfare programs.

The MOF has invited economists and business representatives to review the legislation March 3, and plans to submit it for Cabinet approval by March 10. Lawmakers are expected to debate the bill before month’s end. (JSM)

Write to Meg Chang at meg.chang@mail.gio.gov.tw