Gou attacks government's proposal to increase taxes

The government's plan to levy a minimum tax on high-income earners invited strong criticism from Hon Hai Precision Industry Co (鴻海精密) chairman Terry Gou (郭台銘), yesterday, who said the move was aimed at dividing society into "the rich" and "the poor" and likened it to systems used under communism.

In response, Premier Frank Hsieh (謝長廷) said that many developed countries have adopted a minimum tax system based on the spirit of equity. Hsieh reiterated that the government will implement the policy before the year's end.

Hsieh said Guo might have misunderstood the new minimum tax proposals, which plan to levy 17.5 percent to 20 percent tax on individuals whose annual income is more than NT$8 million, and 7.5 percent to 12.5 percent from companies that earn up to NT$30 million.

Guo made the comments at an annual shareholder meeting yesterday in Tucheng, Taipei County.

Gou said the government should build up an environment that can bear low taxes and should examine its efficiency first rather than using the disparity between the rich and the poor as an excuse to lift taxes.

"Our government loves to cope with problems through division -- that is, to group people as the poor and the rich, which is the same as the strategy that the Communists used when the KMT retreated from China," Gou said. "In our view, the problems result from the government's low efficiency."

When asked about Gou's comments, Hsieh said out that eight of the 40 richest people in Taiwan did not have to pay taxes last year, and 15 of these people paid only 1 percent of their total income in tax.

"The design of the minimum tax [system] actually takes into account economic development and the circulation of capital, as well as the equity of taxes," Hsieh said. "We believe that expanding the tax base is the way to avoid a situation that gives 60 people the workload of 100 people."