The government is planning to implement a luxury tax in the second half of the year as public discontent simmers over the nation’s widening wealth gap, a Ministry of Finance official said yesterday.
The proposed plan would introduce a 10 percent to 15 percent tax on residential property transactions and other expensive items.
“We are starting to draw up draft legislation, hoping the tax will help narrow the nation’s wealth gap,” an official at the Taxation Agency said by telephone on condition of anonymity.
Minister of Finance Lee Sush-der (李述德) said on Thursday that he had proposed the tax plan to President Ma Ying-jeou (馬英九) and gained Ma’s support as the tax meets public expectations of social justice.
Premier Wu Den-yih (吳敦義) said yesterday the introduction of a luxury tax has long been in the works and it would be imposed in the second half of this year.
“While the policy has been decided, details still have to be fleshed out and legal procedures have to be completed before the new tax can be imposed,” Central News Agency quoted Wu as saying.
The tax will be launched in the second half of the year if it gains the approval of the legislature in the first half, Wu said.
Under the ministry’s proposal, a 15 percent tax would be imposed on real estate bought and sold within the same year for speculative investment purposes, while a 10 percent tax would apply to properties changing hands within two years.
A 10 percent tax would also be levied on private jets, yachts and luxury cars with a price tag exceeding NT$3 million (US$100,827). The tax would also apply to club memberships fees of more than NT$500,000, the Taxation Agency official said.
However, luxury bags and accessories will not be included in the new tax, but leather and fur products made from threatened species will incur a 10 percent tax, the official said.
The official said that all details are still under discussion and the ministry will organize public hearings on the issue possibly as early as next month. It will also consult with other government agencies, such as the Ministry of Economic Affairs and the Ministry of Transportation and Communications before making an official announcement.
Afterwards, the proposal would be submitted to the Executive Yuan and the legislature for approval. If everything proceeds smoothly, the new luxury tax will be implemented in the second half of the year, the official said.
The ministry estimates that revenues generated by a luxury tax would reach NT$15 billion, which would possibly be allocated to social welfare programs, he said.