Despite the government's concern over declining tax revenues, it continues to allow affluent people to donate land to save on tax payments.
Taxation authority sources said yesterday that the number of people using the legal "land-for-tax" strategy to save on tax payments has increased substantially in recent years.
Under regulations, taxpayers can purchase land reserved for the construction of public facilities or pathways at a price tag of 10 percent to 20 percent of the officially declared land price and then donate that land to the government.
The taxpayer can then deduct the full amount of the land's officially declared price from their tax returns.
According to tallies compiled by the Taipei City Government, a record 2,836 applications to donate land lots to save on tax payments were approved last year, worth a total of NT$22.26 billion.
The number of approved cases was more than double the 1,045 recorded in 2001, while only 47 cases were approved in 2000.
The growth was even faster in Taipei County. According to official tallies, only two such cases were approved in 2000. The number rose to 100 in 2001 and further surged to 681 in 2002.
Tax officials said the number of 30-something and 40-something management executives in information, financial services and certain traditional industries who have adopted the land-for-tax strategy has increased significantly in the past couple of years.
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