Ministry planning to review luxury tax

Staff writer, with CNA

Sat, Feb 16, 2013 - Page 5

The government does not plan to scrap the luxury goods tax which requires owners of two or more properties, private jets, yachts, luxury cars or any piece of furniture worth over NT$500,000 to pay between 10 percent and 15 percent of the item’s sale price if they are sold within two years of purchase, officials said yesterday after a meeting with premier-designate Jiang Yi-huah (江宜樺).

Jiang is scheduled to be sworn in on Monday.

The Ministry of Finance will review the tax this year, as it has been in place for almost two years, Minister of Finance Chang Sheng-ford (張盛和) said yesterday.

He added that the government had no plans to abolish the tax.

The purpose of the review is to evaluate the effectiveness of the tax, Chang said.

The ministry calculated that from July 1, 2011, when the tax was first implemented, through last year, it has generated NT$5.97 billion (US$202.03 million) in tax revenue, with some 67 percent of this coming from property transactions.

This fell short of the ministry’s previous estimate of NT$15 billion.

The government’s goal for the introduction of the tax was to curb speculation in the property market not to increase tax revenue, and therefore there is no need to abolish the tax because it has not reached government estimates, Chang added.

Housing transactions fell 38.57 percent in New Taipei City (新北市) and 22.31 percent in Taipei during the January-to-October period last year, compared with the same period in 2011 and 2010, the ministry said.

Chinese Nationalist Party (KMT) legislators said on Thursday that they would ask Chang to join a question-and-answer session in the Legislative Yuan to address the luxury tax issue.

“Many KMT legislators are concerned about this tax on luxury goods,” KMT Legislator Lin Te-fu (林德福) said, adding that the KMT caucus does not have a stance on whether to retain or abolish the tax.