Fri, Dec 31, 2010 - Page 12 News List

‘Hot money’ tax not under consideration: minister of finance

Staff writer, with CNA

Minister of Finance Lee Sush-der (李述德) declined to say yesterday whether Taiwan would consider taxing “hot money” from abroad, which has reportedly flooded the local market in recent days on the back of a rising NT dollar.

Lee said during a legislative session that the hot money issue is a matter for the central bank and the Financial Supervisory Commission, but it could be discussed by the relevant agencies.

The government will draw on the experience of other countries before making any decision on the issue, he said, adding that Brazil is the only country that taxes hot money.

Lee was responding to a lawmaker’s question on whether the Ministry of Finance would consider taking measures, such as the imposition of a tax, to stem the flow of hot money.

Chinese Nationalist Party (KMT) Legislator Lai Shyh-bao (賴士葆) said the ministry should make its stance on the matter known in light of the influx of the money.

The finance minister was also asked to expand on Premier Wu Den-yih’s (吳敦義) recent comment that civil servants could expect a pay rise next year.

He said the exact date for the salary increase had not yet been finalized, but in view of the economic recovery, the ministry would make a decision in line with the expectations of the public.

Speaking about a bill that was passed by the legislature’s Finance Committee in May that would scrap income tax exemptions for military personnel and teachers at public elementary and junior high schools, Lee said if it was passed soon it would generate about NT$11.2 billion (US$373 million) in extra tax revenues a year.

If the Income Tax Act (所得稅法) amendment is passed, it will affect about 370,000 workers in the public sector, who would begin to pay income tax in 2012, he said.

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