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.
NEW IDENTITY: Known for its software, India has expanded into hardware, with its semiconductor industry growing from US$38bn in 2023 to US$45bn to US$50bn India on Saturday inaugurated its first semiconductor assembly and test facility, a milestone in the government’s push to reduce dependence on foreign chipmakers and stake a claim in a sector dominated by China. Indian Prime Minister Narendra Modi opened US firm Micron Technology Inc’s semiconductor assembly, test and packaging unit in his home state of Gujarat, hailing the “dawn of a new era” for India’s technology ambitions. “When young Indians look back in the future, they will see this decade as the turning point in our tech future,” Modi told the event, which was broadcast on his YouTube channel. The plant would convert
Nanya Technology Corp (南亞科技) yesterday said the DRAM supply crunch could extend through 2028, as the artificial intelligence (AI) boom has led the world’s major memory makers to dramatically reduce production of standard DRAM and allocate a significant portion of their capacity for high-bandwidth memory (HBM) chips. The most severe supply constraints would stretch to the first half of next year due to “very limited” increases in new DRAM capacity worldwide, Nanya Technology president Lee Pei-ing (李培瑛) told a news briefing. The company plans to increase monthly 12-inch wafer capacity to 20,000 in the first half of 2028 after a
Property transactions in the nation’s six special municipalities plunged last month, as a lengthy Lunar New Year holiday combined with ongoing credit tightening dampened housing market activity, data compiled by local land administration offices released on Monday showed. The six cities recorded a total of 10,480 property transfers last month, down 42.5 percent from January and marking the second-lowest monthly level on record, the data showed. “The sharp drop largely reflected seasonal factors and tighter credit conditions,” Evertrust Rehouse Co (永慶房屋) deputy research manager Chen Chin-ping (陳金萍) said. The nine-day Lunar New Year holiday fell in February this year, reducing
Zimbabwe’s ban on raw lithium exports is forcing Chinese miners to rethink their strategy, speeding up plans to process the metal locally instead of shipping it to China’s vast rechargeable battery industry. The country is Africa’s largest lithium producer and has one of the world’s largest reserves, according to the US Geological Survey (USGS). Zimbabwe already banned the export of lithium ore in 2022 and last year announced it would halt exports of lithium concentrates from January next year. However, on Wednesday it imposed the ban with immediate effect, leaving unclear what the lithium mining sector would do in the
RSS