Minister of finance denies government plans to raise taxes

Minister of Finance Lee Yung-san (李庸三) yesterday denied local media reports that his ministry is considering raising taxes, saying they are instead working on an overhaul of the nation's tax system which will be completed within the next two years.

"I have never said that we want to raise taxes," the TVBS cable TV network quoted Lee as saying yesterday. "What I said is that we may raise or lower taxes ... and we are currently working on a tax reform package."

The ministry organized a financial reform committee last September at the request of participants at a National Economic Development Conference. The committee will study how to balance the government's revenues and expenditures over the next five to 10 years.

The topic of a possible tax increase was brought up yesterday by several Chinese-language newspapers and cable TV networks following a Legislative Yuan Finance Committee meeting held on Wednesday, where legislators from all parties questioned Lee about what the government was doing to control mounting expenses and the huge deficit.

During the meeting, Lee said he agreed with lawmakers' suggestions about adjusting the current tax structure.

While the minister did not specify what taxes would be increased and which would be cut during the meeting, his comments were misinterpreted by some Chinese-language media as meaning the government may raise taxes in 2004 after the presidential election, Lee said.

The Chinese-language media also reported that the timetable was set for 2004 because President Chen Shui-bian (陳水扁) had promised in his election campaign that there would be no tax increases during his first term as president.

Lee said that it will take at least two years for the committee to complete its work and for its recommendations to be approved by the Legislative Yuan.