The Financial Supervisory Commission (FSC) yesterday expressed opposition to a proposed 10 percent levy on capital gains from investment-linked life insurance policies.
“No tax should be levied on such policies, which have greatly contributed to an important social safety net, while policyholders have been paying their taxes to contribute to the nation’s coffers,” Yeh Yin-hua (葉銀華), one of the FSC’s policymaking panelists, told a media briefing.
Yeh said the Cabinet’s tax reform committee might have misunderstood the nature of the policies and the existing regulations for them.
Policyholders for investment-linked insurance products, as well as their beneficiaries, have already paid the income, gift or inheritance taxes that are due and a new tax levy would amount to double taxation, Yeh said.
Such a levy would go against international norms, he said.
The tax reform committee is to finalize a decision on the proposed 10 percent levy today. Yeh said he and officials from the FSC’s insurance bureau would also attend the meeting to voice their disagreement.
To ease the tax reform committee’s concerns that wealthy people have been buying such policies to maximize tax-free capital gains from the attached investment accounts, Yeh said the FSC plans to raise the minimum ratio of death benefits to account value from between 101 percent and 130 percent to between 105 percent and 150 percent or 170 percent.
By raising the minimum ratio, policyholders will have to pay a higher premium to cover their death benefits and, in relative terms, lower the investment portion, he said.
BUSINESS TAX
Separately, the nation’s six major business organizations yesterday called on the government to consider delaying a proposed tax increase plan in 2011, citing bad economic conditions.
Roscher Lin (林秉彬), chairman of the National Association of Small and Medium Enterprises (中小企業協會), who convened a meeting of the six groups, said it would be better for the government to raise business taxes from 5 percent to 6 percent, once the nation’s economy can grow at least 5 percent.
Taiwan’s economy contracted by a record 10.24 percent in the first quarter as the global recession eroded demand for the country’s exports. The government’s statistics bureau has forecast the economy will decline 4.25 percent this year.
The government is considering a proposal to raise business taxes as a way to solve the capital shortage for the nation’s labor insurance annuity program. The 1 percentage point increase in business tax is likely to rake in an additional NT$48 billion (US$1.46 billion) for state coffers each year.
But the business groups said the tax hike could cause consumer prices to rise and place further stress on consumer purchases, adversely impacting the economy.
‘SWASTICAR’: Tesla CEO Elon Musk’s close association with Donald Trump has prompted opponents to brand him a ‘Nazi’ and resulted in a dramatic drop in sales Demonstrators descended on Tesla Inc dealerships across the US, and in Europe and Canada on Saturday to protest company chief Elon Musk, who has amassed extraordinary power as a top adviser to US President Donald Trump. Waving signs with messages such as “Musk is stealing our money” and “Reclaim our country,” the protests largely took place peacefully following fiery episodes of vandalism on Tesla vehicles, dealerships and other facilities in recent weeks that US officials have denounced as terrorism. Hundreds rallied on Saturday outside the Tesla dealership in Manhattan. Some blasted Musk, the world’s richest man, while others demanded the shuttering of his
Taiwan’s official purchasing managers’ index (PMI) last month rose 0.2 percentage points to 54.2, in a second consecutive month of expansion, thanks to front-loading demand intended to avoid potential US tariff hikes, the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday. While short-term demand appeared robust, uncertainties rose due to US President Donald Trump’s unpredictable trade policy, CIER president Lien Hsien-ming (連賢明) told a news conference in Taipei. Taiwan’s economy this year would be characterized by high-level fluctuations and the volatility would be wilder than most expect, Lien said Demand for electronics, particularly semiconductors, continues to benefit from US technology giants’ effort
ADVERSARIES: The new list includes 11 entities in China and one in Taiwan, which is a local branch of Chinese cloud computing firm Inspur Group The US added dozens of entities to a trade blacklist on Tuesday, the US Department of Commerce said, in part to disrupt Beijing’s artificial intelligence (AI) and advanced computing capabilities. The action affects 80 entities from countries including China, the United Arab Emirates and Iran, with the commerce department citing their “activities contrary to US national security and foreign policy.” Those added to the “entity list” are restricted from obtaining US items and technologies without government authorization. “We will not allow adversaries to exploit American technology to bolster their own militaries and threaten American lives,” US Secretary of Commerce Howard Lutnick said. The entities
Minister of Finance Chuang Tsui-yun (莊翠雲) yesterday told lawmakers that she “would not speculate,” but a “response plan” has been prepared in case Taiwan is targeted by US President Donald Trump’s reciprocal tariffs, which are to be announced on Wednesday next week. The Trump administration, including US Secretary of the Treasury Scott Bessent, has said that much of the proposed reciprocal tariffs would focus on the 15 countries that have the highest trade surpluses with the US. Bessent has referred to those countries as the “dirty 15,” but has not named them. Last year, Taiwan’s US$73.9 billion trade surplus with the US
RSS