Despite the recent passage of an amendment to the Income Tax Act (所得稅法) that cancels the decades-old income tax exemption for teachers and military personnel, Taxation Agency officials said the treasury would not see any of that money as the entire amount would be used on complementary measures designed by government agencies.
The amendment will come into force at the beginning of next year and affect about 350,000 individuals, including the active duty military personnel and teachers at day care centers and kindergartens as well as at public and private elementary and junior high schools.
Minister of Finance Lee Sush-der (李述德) had initially said national coffers would receive an estimated NT$16 billion (US$487.8 million) in additional tax revenues annually.
Taxation Agency officials, however, said the Ministry of National Defense (MND) would redirect the extra income to increase pay for staff doing voluntary military service — at a cost of NT$5.73 billion — while the Ministry of the Interior would spend NT$410 million on staff at daycare centers and temporary assistants, as well as on care service for preschool children.
The Ministry of Education (MOE) would use the extra money to hire administrative and counseling officials, increase pay for kindergarten, elementary and high school tutors, and cut class hours for elementary and high school teachers to the tune of NT$9.81 billion, the officials said.
Officials said that in the short term the measures meant the treasury would not see any increase in revenue, but said that in the long run national coffers would gradually benefit from the end to the tax exemptions.
To accommodate the MOE’s measures, the Cabinet passed amendments to the Compilation and Administration of Education Expenditures Act (教育經費編列與管理法) and the Preschool Education Act (幼稚教育法).
Deputy Minister of Education Wu Tsai-shun (吳財順) said taxes collected from 194,000 kindergarten, elementary, and high school teachers would total NT$9.8 billion.
Wu said the education ministry would use NT$2.5 billion to hire more elementary school administrators and high school tutors, while NT$2.9 billion would be used to adjust pay for kindergarten, elementary and high school tutors by between NT$2,000 and NT$4,000 per month. Finally, NT$4.4 billion would be used to cut the number of hours taught by teachers at elementary and high schools by four hours per week and two hours per week respectively, he said.
Wu said the MOE would not stand in the way if schools hired more teachers as a result of the cuts in the number of hours taught, adding it hoped schools would turn to part-time teachers already there first.
MND spokesperson Yu Si-zu (虞思祖) said that to avoid a drop in real wages, the MND would increase pay for soldiers doing voluntary service, adding that details would be given at a later stage.
ADDITIONAL REPORTING BY CNA
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