The Legislative Yuan yesterday preliminarily passed a proposal to permanently lower incremental land-value tax rates in a bid to boost the recovering real estate market.
Inter-party negotiations on the proposal to adjust the tax rates are scheduled for today. The proposal is slated to get a third reading -- to be officially approved by the legislature -- on Thursday at the earliest, according to lawmakers involving in the negotiations.
The current legislature has its last session Friday.
The proposal, drafted by the Ministry of Finance, stipulates that tax rates would be cut from the current 40 percent, 50 percent and 60 percent to 20 percent, 30 percent and 40 percent, respectively.
The Executive Yuan submitted the proposal for legislative review last month, which left the lawmaking body less than one month to complete amendments to the Land Tax Law (
This has raised concerns that lawmakers may not approve the government's proposal to permanently lower tax rates and that they will be more inclined to extend the temporary measure of halving the tax rates for another year.
But, in the face of increased pressure from the public, lawmakers and government officials held a three-hour negotiation session on Sunday. Should the lawmakers give the greenlight to the amendments, the new rates would become effective on Feb. 1.
"Firms with large amounts of land assets might therefore be able to lower their provisioning for the incremental land-value tax and increase their book value," SinoPac Securities Co (
The government initiated a plan to reduce the incremental land-value tax by 50 percent in February 2002 for two years, with the hope of revamping the then sagging property market.