The government is planning to increase tobacco tax by as much as NT$25 (US$0.79) per pack of cigarettes to fund public long-term heathcare services, Premier Lin Chuan (林全) said yesterday.
The Chinese-language Liberty Times (the Taipei Times’ sister newspaper) yesterday said that the Executive Yuan plans to raise the tobacco tax by NT$20 and the health and welfare surcharge on tobacco products by NT$5 per pack.
The premier confirmed the planned increase, but did not specify the exact amount.
“The [planned] increase in tobacco tax and surcharge is to raise funds for long-term healthcare services, which are important social welfare services,” Lin said.
“We will calibrate the increase in cigarette prices caused by the increased tax and surcharge according to international standards. I do not think [the adjusted prices] will differ much from international levels,” he added.
According to the Liberty Times, the Executive Yuan is also mulling an increase on tobacco tax, because unlike the tobacco surcharge, which can only be used for restrictive purposes, the tobacco tax can be used more broadly.
The increase in cigarette prices is reportedly to be capped at NT$25 per pack and the policy is expected to be finalized on Thursday pending discussions between the Executive Yuan and the Legislative Yuan.
Minister Without Portfolio Lin Wan-i (林萬億) said the planned increase could raise about NT$23 billion in additional tax revenue.
However, the Ministry of Finance said the exact tax revenue has yet to be calculated pending the finalization of the policy, adding that there is a shortage of about NT$30 billion in the long-term healthcare service fund.
Consumers currently pay NT$11.8 in tobacco tax and NT$20 in surcharges for each packet of 20 cigarettes.
The Executive Yuan also plans to increase the estate and gift tax from 10 percent to a maximum of 20 percent to fund long-term healthcare services, which is estimated to generate an additional NT$6 billion.
The government plans to replace the fixed 10 percent estate tax with three tax rates of 10 percent, 15 percent and 20 percent, which would be applied to inheritances worth less than NT$50 million, between NT$50 million and NT$100 million, and more than NT$100 million respectively.
Meanwhile, gifted property worth less than NT$25 million, between NT$25 million and NT$50 million, and more than NT$50 million are to be subject to a 10 percent, 15 percent and 20 percent tax respectively.
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