Using a credit card to pay taxes can allow cardholders to delay payment for up to 45 days -- when the bill arrives -- but as most banking institutions have been hit by bad consumer loans, many are cutting back on incentives for paying taxes this way.
"As the widespread credit and cash-advance card default problem has eaten into financial institutions' profits, many banks have changed their polices this year and have decided to levy some fees on taxpayers," said Tomy Wong (
"Even so, we expect the number of people paying taxes with their credit cards will continue to grow as this is still more advantageous for them compared with other means," he said.
Last year, tax returns filed via credit cards topped NT$17.35 billion (US$552.6 million), accounting for 8.7 percent of total tax payments, according to statistics from the Ministry of Finance and the National Credit Card Center.
That was up from NT$16.38 billion, or 7 percent of all payments, in 2004, and NT$7.77 billion, or 3 percent, in 2003.
This year, at least 12 of 49 card issuers are offering zero-handling fee programs for tax payments, including state-run institutions such as the Bank of Taiwan, the Lank Bank of Taiwan and Taiwan Cooperative Bank, as well as private banks such as E.Sun Bank, Taipei Fubon Bank and Citibank Taiwan.
The best deal can be gotten by choosing cards that do not charge processing fees and offer bonus points, such as the Hongkong and Shanghai Banking Corp (HSBC) and Cathay United Bank. But these two issuers cap their bonus points.
HSBC allows taxpayers one point for each NT$25 up to a maximum of 20,000 points. Cathay United cardholders can pocket one point for each NT$20 for a maximum of 2,000 points.
Most banks are instead offering bare-bones benefits: no handling fees and no bonus points. Taipei Fubon Bank, Citibank Taiwan, Taiwan Shin Kong Commercial Bank, First Commercial Bank and ABN AMRO Bank are in this group. However, some restrictions apply.
State-controlled First Commercial charges a 0.5 percent handling fee for tax payments of more than NT$300,000.
At the other end of the spectrum, several banks are still giving away bonus points to cardholders but they are also levying handling fees, ranging from NT$20 to 1 percent of tax payments.
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