The Cabinet yesterday approved a package of proposals to reinstate income taxes for military personnel and teachers at the junior high school level and below while increasing allowances to compensate for losses caused by the tax.
Eliminating the tax exemption for teachers and military personnel will be a “milestone in the country’s tax history,” Premier Liu Chao-shiuan (劉兆玄) said, adding that the government hoped to implement the new measures at the beginning of next year.
Executive Yuan Spokesman Su Jun-pin (蘇俊賓) yesterday quoted Liu as saying that the proposed amendments were a move toward a fairer tax system.
Related amendments to the Income Tax Act (所得稅法), the Compilation and Management of the Education Expenditure Act (教育經費編列與管理法) and the Kindergarten Education Act (幼稚教育法) will now be referred to the legislature for review.
The Ministry of Finance said that as about 320,000 people are currently exempted from paying income tax — including kindergarten, elementary school and junior high school teachers, as well as military personnel — their income tax payments are expected to add NT$15.5 billion (US$473.81 million) annually to national coffers.
The additional tax revenue will be used to improve the education environment instead of being used by the national treasury for other purposes, Su said.
Under the complementary measures, the Ministry of Education (MOE) will increase subsidies for elementary schools and junior high schools, hiring more administrative personnel and reducing the number of class hours allotted to teachers to lessen their workload.
Faculty members in elementary schools and junior high schools who serve as class advisers will receive higher pay, the MOE said in the proposal.
Kindergarten teachers are expected to receive higher allowances on top of their salary.
Meanwhile, the Ministry of National Defense will increase the extra subsidies currently given to military personnel for duty-related activities, on top of their monthly salary.
Military personnel and teachers have enjoyed tax-free status since 1944 and 1979 respectively as the then government wanted to look after special professional groups and encourage people to devote themselves to such jobs then.
National Teachers Association president Kevin Wu (吳忠泰) yesterday lauded the Executive Yuan’s plan to cancel the tax breaks.
“The tax exemptions for teachers at junior high and elementary schools and kindergartens were introduced a long time ago,” Wu said. “We support the proposed amendment to the Income Tax Act approved by the Executive Yuan and are thankful that the Executive Yuan respects the need for the Ministry of Education and teachers’ organizations to negotiate changes in teachers’ working conditions.”
Also lauding the measure, Democratic Progressive Party (DPP) Legislator Tsai Huang-liang (蔡煌郎) yesterday said the idea was pitched during the DPP era.
“It is very funny that the KMT now realizes the DPP had the right policies. Back then it strongly opposed the idea. The KMT is taking the credit for the DPP’s work,” he said.
Kuan Bi-ling (管碧玲), another DPP lawmaker, asked why, if the KMT felt this was the right course of action, did the party boycott it four years ago when Ma was KMT chairman?
“If you look at the text, it is almost a carbon copy of the version we pitched four years ago. The KMT wasted four years before doing the right thing,” she said.
ADDITIONAL REPORTING BY FLORA WANG AND JENNY W. HSU
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