The Ministry of Finance yesterday raised the taxable thresholds for personal income taxes after consumer prices rose more than 3 percent in the past four years, triggering the upward adjustment.
The ministry published the adjustments on its Web site, which it expects to benefit more than 6 million taxpayers who could save an average of NT$1,776 (US$55.74) in tax burdens in May 2018.
“Consumer prices rose 3.06 percent between 2013 and this year, meeting the requirement to elevate the taxable threshold on income taxes from NT$85,000 to NT$88,000,” the ministry said in statement.
A total of 6.08 million people filed income taxes last year, with 2.25 million spared paying income tax due to tax breaks and credits, the ministry said.
An additional 67,336 taxpayers would qualify for the exemption following the latest adjustment, it said.
The figures suggest an additional NT$6.8 billion in disposal income for all taxpayers, the ministry said, which is favorable for the government’s efforts to boost consumer confidence when the benefits of cheaper crude oil prices gradually fade.
Cheaper crude and raw material prices have dragged on the consumer price index in recent years during which time food costs, especially vegetable and fruit prices, have increased significantly, official data showed.
People on a low income feel the pinch more evidently given that food is essential.
The ministry said that it kept other tax deduction requirements unchanged, because they had been adjusted last year.
The better-than-expected tax revenues lend support for the tax cut. In the first 11 months of the year, tax revenues rose 4.6 percent to NT$2.86 trillion and could surpass the budget target by nearly 6 percent, the ministry said.
Minister of Finance Sheu Yu-jer (許虞哲) earlier told the legislature’s Finance Committee that he considered tax cuts using surplus revenues that might hit NT$100 billion this year on top of a NT$200 billion surplus last year.
Sheu said the ministry is now assessing the desirability of cutting taxes for daily trade in the hope of invigorating the local bourse.
Critics have blamed the light turnover on heavy tax burdens.
Daily securities transactions on the Taiwan Stock Exchange and the Taipei Exchange averaged NT$103.5 billion in the first nine months of the year, down from the NT$116.1 billion recorded in the same period last year, Chinese Nationalist Party (KMT) Legislator William Tseng (曾銘宗) said.
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