Economic woes further sapped the nation’s coffers last month as the revenue shortfall rose to a record NT$193.7 billion (US$6 billion) and was expected to remain high for the rest of the year, the Ministry of Finance said yesterday.
The treasury collected an extra NT$204.1 billion in tax revenues last month, bringing the total amount to NT$1.199 trillion, down 16 percent from last year, a ministry report showed.
“The revenue shortfall widened to NT$193.7 billion [last month], the biggest ever,” Lin Lee-jen (林麗貞), head of the ministry’s statistics department, told a media briefing. “The figure constituted only 67.2 percent of the target sum, from 82 percent at the same time last year.”
The fiscal budget is set at NT$1.784 trillion this year, a figure that appears untenable based on the showing so far. Lin pinned the blame mainly on the financial turmoil that has dented economic activity and tax revenues.
Business income tax, which accounts for nearly 40 percent of all levies, contracted 21.6 percent to NT$279.7 billion last month, owing to falling corporate profits, Lin said. However, the levy rebounded 4.2 percent to NT$79.3 billion last month, she said.
Meanwhile, personal income tax dropped 19.2 percent year-on-year to NT$271.6 billion at the end of last month, the report said.
Lin linked the decrease to income tax cuts as well as shrinking personal incomes amid the recession. Personal income stood at NT$37.7 billion last month, dropping NT$11.8 billion annually, or 23.8 percent, the report said.
Cheng Yi-ho (鄭義和), deputy director-general of the ministry’s Taxation Agency, said the revenue deficit would ease but stay above NT$180 billion at the end of the year on improving economic signs. The figure has yet to factor in the tariff reduction, he said.
Taxes on securities transactions and capital gains from rising land value are expected to narrow the shortfall, as they posted robust growth of 48.8 percent and 28 percent respectively last month, from the level last year, the report said.
The treasury collected NT$9.5 billion in securities transactions tax and NT$4.7 billion in land value increment tax, the report said.
Business tax is likely to provide some relief after picking up 27.2 percent last month to NT$11 billion, from a year earlier, due primarily to a low base, the report said.
Lin said car sales have exceeded 20,000 units since June because of the tax cut on purchases of small cars.
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