Taiwan’s Uniform Invoice lottery system, with a drawing every two months, is unique among the tax systems of the world.
The top prize is NT$2,000,000 (US$64,600) and the smallest award is NT$200. The lottery was created in the 1950s by Jen Hsien-chun, who was concurrently director of the tax office for the Taiwanese provincial government and chairman of the board for the Bank of Taiwan. Another design of his was the "patriotic lottery." These two plans greatly improved the nation’s fiscal health.
Jen’s receipt lottery system is meant to stop tax evasion. Whenever a transaction is made, the business should issue a receipt to the purchaser, and a copy of the receipt will go to the government to be used as the basis for taxation. Since the receipt number will allow holders of the receipts to win cash prizes through a lottery system, people in turn are more likely to ask for them from the businesses with which they conduct transactions.
The system stipulates that some business types and companies doing less than NT$200,000 a year in business are exempt from issuing receipts. But people often forget to ask for a receipt, or perhaps do not even know one should have been issued.
The Tax Department’s Chiayi office has done audits that show that businessmen frequently fail to issue receipts to customers, and in an attempt to evade taxes, some of them never issue any receipts at all. At the same time, other businesses do issue receipts but did not give them to the customers, instead keeping the receipts in hopes of winning a prize themselves.
(This article originally appeared in The Liberty Times Oct. 3.)