The legislature’s Finance Committee on Thursday completed a review of tax legislation that could increase government tax revenue by NT$65 billion (US$2.15 billion) as part of a broader plan for tax reforms, Minister of Finance Chang Sheng-ford (張盛和) said.
If approved by the legislature, the draft amendment to the Income Tax Act (所得稅法) would raise the income tax credit from NT$79,000 to NT$90,000.
The disabled and others receiving a special credit on salary, will also receive a rise in their income tax credits from NT$108,000 to NT$128,000.
The Ministry of Finance estimates that more than 6.47 million taxpayers are to benefit from the higher tax credit, which could be applied to income taxes this year.
A new 45 percent tax bracket on individual net income exceeding NT$10 million would also be introduced under the amendment.
The Finance Committee also passed a bill to amend the Value-added and Non-value-added Business Tax Act (加值型及非加值型營業稅法) to raise tax on core sales in the banking and insurance business from 2 percent to 5 percent.
The bill also stipulates a 10 year expiration of the existing rules allowing tax revenue from the financial sector to be placed into a financial institution bailout fund.
Insurers would only see sales taxed after retention expenses are excluded, based on a suggestion made by the Financial Supervisory Commission.
The policy is in line with practices in other countries and is to ease the burden on insurers, it said.