The legislature passed a tax reduction bill yesterday that will increase four deduction thresholds for individual income taxes in time for next May, when taxpayers next file their returns.
Lawmakers across party lines hailed the passage of the amendment to the Income Tax Law (所得稅法), which is aimed at easing the public’s economic burden.
Under the amendment, the standard tax deduction threshold for individual income was raised from NT$38,000 (US$1,140) to NT$73,000 for an unmarried taxpayer, while that for a married couple was increased from NT$76,000 to NT$142,000.
A salary or wage earner’s special deduction threshold will be increased from NT$75,000 to NT$100,000, while the figure for the disabled will also be raised from NT$63,000 to NT$100,000.
The amendment also granted a deduction of NT$25,000 per student in each household for higher education expenses, replacing the current NT$25,000 for each tax return.
The tax bureau might also adjust the standard tax deduction for an individual’s income, a salary or wage earner’s special deduction, and the deduction for the disabled to comply with the inflation-adjustment rule.
For example, the Ministry of Finance (MOF) increased a salary or wage earner’s special deduction from NT$75,000 to NT$78,000 this May when tax payers filed their returns for last year.
Meanwhile, taxpayers will get another tax deduction for the premiums they pay to the National Pension system, the social security mechanism that was launched in October to cover the 3.5 million people who previously lacked any form of pension benefits.
The government said that about 3.6 million households would benefit from the amendment, which will take effect on Jan. 1, accounting for 69 percent of the country’s approximate 5.18 million households.
The MOF had said in its proposal that granting more tax reductions would help the economy, despite estimated losses of NT$21.8 billion in tax revenues, as they would spur consumption.