The government should use the estimated NT$15 billion (US$510 million) in proceeds from the new luxury tax to subsidize education for low-income families and help cover some of the medical costs of children and the elderly, Democratic Progressive Party (DPP) lawmakers said yesterday.
To prevent money generated by the luxury tax from disappearing and ensure it is not diverted for purposes unrelated to social welfare, the distribution of the luxury tax revenues should be enshrined in law, DPP Legislator Huang Wei-cher (黃偉哲) said.
“It is only fair to use the [tax revenues] to help subsidize the working class and more disadvantaged groups,” he said.
The amendment would replace what Huang called an ambiguous clause in the Executive Yuan’s version of the draft of the tax levied on specific goods and services act, which states that the tax revenues should be “used for social welfare.”
Items proposed by Huang include using the luxury tax proceeds to subsidize meals for elementary and junior high school students, offset school fees for university students and fund daycare programs.
Medical registration costs for seniors more than 65 years of the age and children under the age of 12 would also be subsidized under his proposal, along with long-term care, Huang said.
The DPP caucus, with 33 of the legislature’s 108 lawmakers, has already indicated its support for Huang’s proposal.
DPP caucus whip Gao Jyh-peng (高志鵬) said party lawmakers would aim to better define the -luxury tax to ensure that the proceeds were only used to help middle and low-income groups.
“Without such articles enshrined into law, we are concerned that the [subsidies for social welfare] won’t materialize and they will simply become a slogan,” Gao said.
The legislature is expected to start reviewing the act early next month.
Chinese Nationalist Party (KMT) legislative caucus -secretary-general Hsieh Kuo-liang (謝國樑) said the draft act, which would levy a tax on high-end goods and services, could be placed on the legislature’s Finance Committee agenda on April 6 at the earliest, following a public hearing on Thursday.
The tax was proposed in the wake of increasing complaints by residents unable to afford homes because of high property prices — particularly in northern Taiwan.
Another lawmaker said the government should clearly explain its policy on the proposed tax, since residents he represents in southern Taiwan do not have a clear understanding of it.
“They now think they will need to pay a hefty tax if they buy a home,” said the lawmaker, who spoke on condition of anonymity.
He added that southern Taiwan was not troubled by high property prices.
The proposed tax has already had a negative impact on the property market in the south, resulting in fewer interested buyers, he said.
Government officials have repeatedly assured the public that the new measure would only affect speculators seeking short-term profits, not long-term property owners.
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