Taiwan’s taxpayers can expect to save NT$59.1 billion (US$2.04 billion) in payments when they file tax returns next month, the Ministry of Finance said April 21.
“A number of tax reduction measures are expected to free up NT$24.8 billion in disposable income for 3.8 million households in Taiwan, with lower-income groups set to become the biggest beneficiaries,” said MOF Minister Lee Sush-der.
These measures include higher deductibles, a higher threshold of minimum taxable income from NT$410,000 to NT$500,000 as well as a 1-percentage-point reduction in the nation’s bottom three tax rates to 5 percent, 12 percent and 20 percent for individual taxpayers, the minister pointed out.
For a double-income family earning NT$1 million with two underage children claiming standard deductions, tax cuts can amount to NT$3,120, or 16.67 percent, while a similar household earning 10 times as much will save only 1.77 percent, Lee explained.
A lowered corporate income tax from 25 percent to 17 percent will benefit the country’s 740,000 firms with savings totaling NT$34.3 billion.
Other than lower payments, more than 2 million individuals can save time and paperwork when preparing their tax returns with this year’s streamlined reporting process, he added.
The minister said individual taxpayers can expect NT$4 billion in additional disposable income next year when a lower withholding tax rate takes effect.
According to MOF statistics, in 2008, 2.24 million households in Taiwan fell within the lowest 6-percent tax bracket and contributed to 7 percent of the combined income taxes, while 1.94 million individuals paid no taxes at all.
In the same year, about 40,000 households paid the highest 40-percent rate, accounting for 46.8 percent of the taxes collected. (HZW)
Write to Meg Chang at meg.chang@mail.gio.gov.tw