Minister of Finance Lin Chuan (
"Such a tax-cut proposal will end up complicating the nation's taxation system, while upsetting the government's efforts to follow through with tax reform," Lin told a press conference yesterday.
Lawmakers gave the green light to the finance ministry's proposal to permanently lower the land-value tax's top rate from the current 60 percent to 40 percent on Monday, but some legislators, including the People First Party's Norman Yin (
The measure was also on the agenda of inter-party negotiations yesterday afternoon.
As of press time, legislators had not finalized the details of the measure, and had agreed to conduct another round of inter-party negotiations today. Today's talks will be chaired by Legislative Speaker Wang Jin-pyng (
Lin called the measure "well intended," in that it encouraged long-term ownership of land, but added it was "problematic." He said the incremental land-value tax is imposed on capital gains, which have nothing to do with the length of possession.
Business conglomerates, not socially disadvantaged farmers, would be most likely to benefit from the measure since they usually possess properties for a long time, Lin said.
In addition, as no incremental land-value taxes are imposed on land designated for farm use, the proposed measure would be redundant, Lin said.
If lawmakers pass the proposed measure, local governments will lose an estimated NT$18 billion in tax revenues every year, according to the ministry's statistics.
Meanwhile, a halved one-time incremental land-value tax imposed on individual home-owners, is expected to be returned to its original rate of 10 percent in February.