Minister of Finance Lee Sush-der (李述德) yesterday said he did not support offering tax breaks for “special accounts” to facilitate capital repatriation, saying the government needed money to fund public works.
Lee made the statement following media reports that the Ministry of Finance was receptive to a proposal by the Financial Supervisory Commission (FSC) to exempt “special accounts” at offshore units of local banks from business tax, business income tax and stamp tax.
The definition of “special accounts” remains unclear.
The reports said the proposed tax breaks were expected to lure NT$5 trillion in capital back from overseas, invigorating local money markets and boosting economic growth.
Lee said during a meeting with business representatives that he did not know the details of the FSC proposal, but that the tax breaks mentioned in the media reports were not advisable.
“The government will be unable to finance public works if everyone refuses to pay tax,” Lee said.
Lee said he supported measures that would spur economic growth, but the government had already made substantial tax cuts in the past year.
The inheritance tax has been set at a flat rate of 10 percent from a range of 2 percent to 50 percent, while business income tax has been cut from 25 percent to 20 percent, Lee said.
Meanwhile, the government has raised deductible sums on taxable income for everyone, he said.
The minister declined to comment on the estimated capital that a “special account” tax exemption would attract.
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