An Executive Yuan taskforce has recommended several new measures that would help reduce the nation’s widening wealth inequality.
The taskforce made its recommendations during a Sept. 29 Cabinet-level meeting presided over by Vice Premier Sean C. Chen, held in the wake of several recent studies suggesting that the gap between Taiwan’s haves and have notes is growing ever larger.
The measures recommended by the taskforce include imposing an excise tax on big-ticket goods, services or transactions, adjusting the existing land tax and house tax systems, and implementing an energy tax, sources familiar with the issue said.
Minister of Finance Lee Sush-der said in response that his ministry will formulate specific regulations that target the extremely affluent. The MOF will also come up with rules to tax such luxury goods as mansions and private jets more heavily.
In addition, the MOF is proposing amendments to article 46 of the Equalization of Land Rights Act to mandate more timely and accurate appraisals of real estate properties in times of unusual price fluctuations.
Real estate investors have been able to exploit a loophole in the existing taxation law that allows them to make a quick profit from engaging in short-term speculative transactions, Lee pointed out.
“By bringing the declared values of such properties gradually in line with their market values, the move will make real estate speculation more costly,” the official explained.
The proposed energy taxes will also help narrow income inequality, Lee added. The additional tax revenues can be used to increase tax credits and deductions to individuals and offset the effect of lifting commodity taxes on several necessities, he explained.
Kuomintang Legislator Lai Shi-bao supported the excise tax, noting that a heavier tax burden on the rich will contribute to wealth equality, while Gao Chih-peng from the opposition Democratic Progressive Party urged the government to impose a capital gain tax on specific transactions.
Tseng Chu-wei, honorary professor in public finance at National Chengchi University, pointed out that a fair taxation system on income and property gains, rather than consumption taxes, is the more effective way to ensure wealth equality. (HZW)
Write to Meg Chang at meg.chang@mail.gio.gov.tw