The Cabinet was instructed in 2003 to cancel commodity taxes on rubber tires, drinks, plate glass and electric appliances, as well as abolishing stamp and entertainment taxes.
To make up for tax-revenue losses, the Cabinet's financial reform committee suggested raising the value-added tax (VAT) by one to two percentage points from its current level of 5 percent.
Raising VAT by one percentage point would rake in an extra NT$40 billion of tax revenue, according to the ministry. However, manufacturers would be expected to transfer the extra burden onto consumers by raising retail prices.
"Commodity prices have seen significant changes recently. A new round of assessments is required and therefore the consumption tax reform should be postponed to next year," he said.
Government figures showed that the consumer price index (CPI) -- a key barometer of inflation -- rose 1.35 percent in the January-July period from a year ago. Although prices for tissues, flour and public transportation are also on the rise, the government still estimates that annual CPI growth can be kept under 2 percent.
Other issues
Reiterating his desire to serve this country, Ho said that tax reforms should be evaluated and programmed together, rather than fixing one piece here and another part there at different times.
Therefore, he said the ministry will review the 10-percent tax on companies' undistributed surplus earnings, the Statute for Upgrading Industries (
Ho vowed to bring the US systems of tax enforcement and tax schemes as a model for his native country.
"It's not that important whether a system is good or bad. It can be criticized any time. But it must be fair and enforced by reliable and consistent people, as with the example of the US Internal Revenue Service. Although it's a tax-collection agency, the IRS is widely respected in the US for its integrity," he said.
He said that the ministry is introducing a new tax inspection system modeled on one in the US to pursue fair taxation. Ho expects the new system, which will target the "big fish" who evade taxes, to inject an additional NT$30 billion into state coffers next year.
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