No plans to expand luxury tax: ministry

By Amy Su  /  Staff reporter

Thu, Nov 14, 2013 - Page 13

Minister of Finance Chang Sheng-ford (張盛和) yesterday said the government has no plans to change the implementation of its luxury tax on real-estate resold within two years to a tax on property resold within three years or more.

Chang said the ministry would submit a revised draft on the tax to the Cabinet for review by the end of this month.

The draft may also loosen its exemption clauses to give the finance ministry more flexibility to handle different cases, he told the legislature’s Finance Committee.

The ministry introduced the special sales tax on select goods and services — also known as the luxury tax — on June 1, 2011, in part to deal with rising speculative property transactions in several major urban areas.

The government imposes a 15 percent luxury tax on properties resold within one year of purchase and a 10 percent tax on those resold within two years of purchase.

However, various tax experts during the review of the tax have called on the government to extend it beyond the two-year period.

Chang said the government would not adopt that suggestion, citing concerns over the continuing sluggish economic sentiment in Taiwan.

“With a significant change in the tax, the nation may see its GDP growth slide down further,” Chang told reporters on the sidelines of a question-and-answer session at the legislature.

In related news, the government may revise downward its forecast for growth this year later this month because of lower-than-expected exports and sluggish momentum in consumption, in part due to the recent food safety issue, Directorate-General of Budget, Accounting and Statistics (DGBAS) Minister Shih Su-mei (石素梅) said yesterday.

The DGBAS will update its forecast for full-year economic growth on Nov. 29.

In August, the DGBAS cut its annual GDP growth forecast for the nation to 2.31 percent for this year, but various international and domestic economic institutes have cut their forecasts to lower than that since then due to weaker-than-expected momentum in the third quarter.