The legislature’s Finance Committee yesterday approved the luxury tax bill, although several lawmakers remained concerned about the bill’s fairness and its potential impact on the housing market.
The government is expected to introduce the tax on June 1 at the earliest, with the Chinese Nationalist Party’s (KMT) full support, the party’s Policy Committee executive director Lin Yi-shih (林益世) said.
“The results from the preliminary review met the public’s expectations and the KMT will do its best to help it proceed to the second and third readings on April 22 at the earliest,” Lin told reporters after the review.
The KMT caucus showed its determination to pass the bill as soon as possible, with Lin and KMT caucus whip Hsieh Kuo-liang (謝國樑) both attending yesterday’s review at the Financial Committee.
However, lawmakers from southern Taiwan could delay the schedule set by the KMT.
KMT Legislator Ho Tsai-feng (侯彩鳳) expressed concern about the bill’s impact on southern Taiwan’s real-estate market, saying the region’s numerous low-priced houses should be excluded from the levy.
“The planned levy could further lower real-estate prices in southern Taiwan ... and seriously hit the region’s economy,” Ho said during a legislative question-and-answer session.
Ho asked the Cabinet’s Council for Economic Planning and Development to look into the planned tax’s potential impact on GDP, clarifying how much the nation’s economy would be affected.
Independent legislator Kang Shih-ju (康世儒) opposed the bill, saying it could negatively affect 80,000 workers in the cement, civil engineering and paint industries.
However, Minister of Finance Lee Sush-der (李述德) said the impact would be short-lived. He reiterated that the luxury tax only focused on the housing market in specific regions with unusually high prices and was intended to help the nation’s real-estate industry in the long-term.
“Although the whole real-estate market seems to be influenced now, this will only be short-term,” Lee said.
Transactions of pre-sale houses remained excluded from the levy, as this type of transaction involves transfers of ownership and not sales per se.
Currently, people who sell a pre-sale property must pay income tax of up to 40 percent, higher than the proposed luxury tax, Lee said. The planned levy would impose a 15 percent tax on properties resold within one year of purchase and a 10 percent tax within two years of purchase.
“The ministry is making efforts to obtain full information about such transactions from real-estate firms and enhance their tax inspections,” Lee said.
Among the revised articles of the bill, coral jewelry not from protected species was removed after yesterday’s review.
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