Tue, Dec 21, 2010 - Page 12 News List

Finance ministry eyes luxury goods tax

Staff writer

The government may impose a tax on luxury goods, such as imported automobiles and lavish jewelry, in the next six months at the earliest, although it has no plan to levy a tax on money from overseas investments, Minister of Finance Lee Sush-der (李述德) said yesterday.

Lee made the remarks during his question and answer session at the legislature.

The ministry is considering imposing a tax ranging from 5 percent to 20 percent on certain luxury goods, the minister said.

Lee made the comment after taking questions from lawmakers on the potential impact of a luxury tax. Premier Wu Den-yih (吳敦義) has suggested taxing luxury jewelry, watches and imported cars to help narrow income gaps.

About 5 percent of tax payers would be affected by the new taxes, the ministry said.

Lee said the ministry could draw up a measure in six months without dampening purchases of luxury goods.

The minister avoided questions about when the tax would be imposed, saying a definite timetable needs further study to avoid the taxes affecting the economy.

Lee, however, said the ministry has no plan to follow South Korea’s steps and impose a tax on money from overseas investments.

“The economic situation in Taiwan differs from that in South Korea and other countries,” Lee said. “It is better to rein in hot money through capital controls, as all taxes should remain neutral.”

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