Minister of Finance (MOF) Sheu Yu-jer (許虞哲) yesterday told lawmakers that reassessing taxes on dividends is not among the government’s top priorities this year, and that no changes to the regime are to be implemented until next year.
Sheu made the remark during a question-and-answer session at the legislature during a meeting of the Finance Committee.
The comment came the day after Financial Supervisory Commission (FSC) Chairman Ding Kung-wha (丁克華) told the same committee that taxation is the purview of the Ministry of Finance.
“The ministry will begin assessing changes on dividend taxes and dividend-tax deductions in the second half,” Sheu said. “With public hearings on the matter scheduled to begin next month, it is not likely that changes will be implemented before the end of this year.”
Ding told reporters at an appearance later yesterday that he respects the ministry’s stance, as the governing body’s decision is based on macroeconomic calculations, whereas he focuses on the financial sector.
At the meeting, Sheu said the ministry’s tax reform priorities are amending rules on extending deductions for taxpayers who have provided non-cash donations and amending the Income Tax Act (所得稅法) and the Customs Act (關稅法) in order to meet the new government’s objectives of promoting innovation, creating jobs and distributing wealth fairly.
The planned amendments are aimed at countering tax evasion, establishing taxation guideline precedents on cross-border e-commerce activities and retaining the nation’s white-collar talent, he said.
Democratic Progressive Party (DPP) Legislator Wu Ping-jui (吳秉叡) said that high tax burdens caused the number of initial public offerings to fall from the previous few years’ 150 to 160 new listings annually to about 60 last year.
Wu told Hsu that both long and short-term interests are highly sensitive to any developments in major issues, such as changes in dividend taxes, and their reactions would have tremendous impacts on markets.
“The government should be focusing on expanding the tax base, not raising the tax rate,” Wu said, adding that the ministry must balance the economic impact of revenue collection, and address the disparity in tax obligations for foreign and domestic institutions.
Chinese Nationalist Party (KMT) Legislator William Tseng (曾銘宗) said that economic growth continues to be hampered as businesses face increasing difficulties raising capital on the local bourse.
KMT Legislator Lai Shyh-bao (賴士葆) railed against the ministry’s plans to assess separate taxes for personal income and dividend income as well as extended deductibles for non-cash donations which he said would cause about NT$100 billion (US$3.07 billion) in lost revenues from wealthy individuals and active stock traders.
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