Sun, Dec 31, 2017 - Page 6 News List

[ LETTERS ]

If the government goes ahead with the separate taxation of stock dividends, it will have broken the progressive tax system, which should be a fundamental component of a fair tax system.

By comparison, the South Korean parliament on Dec. 6 passed a budget bill in preparation of a tax increase for big companies and wealthy people beginning next year.

The income tax rate for individuals earning more than 500 million won (US$44.5 million) is to be increased from 40 to 42 percent, and the income tax for incomes between 300 million and 500 million won is to be raised to 40 percent.

For companies, a new business tax bracket is to be introduced, raising the tax for companies with an annual income of more than 200 billion won to 22 percent from 20 percent, while the highest capital gains tax on stockholders is to be raised from 20 to 25 percent.

This increases national tax revenue, which helps create employment opportunities, expand social welfare measures, improve low-income growth and mitigate polarization.

As the public pays taxes, the government uses the tax revenue to adjust the wealth gap and care for disadvantaged groups.

However, it seems that Taiwan’s tax reform policy brings limited benefit to grassroots employees and many other wage earners, while benefiting the wealthy, and perhaps further widening the wealth gap.

The draft Income Tax Act (所得稅法) amendment last week passed its second reading at the legislature, so one can only hope that there is still some room for explanation, debate and adjustment.

Wei Szu-yuan

Yilan County

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