The Ministry of Finance is expected to raise income tax deductions by the end of this year to ease the tax burden on income earners next year, as consumer prices have grown beyond the trigger point since previous adjustments.
Taiwanese file their income taxes in May each year for income earned the previous calendar year.
Assorted tax deductions are linked to the consumer price index, which has risen more than 3 percent over the past three years.
Photo: CNA
That increase qualifies for upward revisions to the allowances by the government so people would feel less of the pinch, KPMG Taiwan said.
The inflationary gauge last month picked up 2.63 percent from a year earlier, the highest in eight-and-a-half years, and might gain further momentum on the back of steep increases in global oil and raw material prices, the Directorate-General of Budget, Accounting and Statistics said last week.
Income tax laws obligate the Ministry of Finance to make adjustments based on the average 12-month consumer price index data ending this month, the accounting firm said.
As of last month, the consumer price index had advanced 4.04 percent to 103.72, from the last revision at 99.69 in 2017, KPMG Taiwan said.
The chances of an upward adjustment are high, if not utterly necessary, the company said, adding that a consumer price index increase of 4 percent would mean an extra deduction of NT$4,000 (US$142.62) from taxable income.
The release of this month’s consumer price index data early next month should shed final light on the matter, KPMG Taiwan said.
Rising inflation also means the government has to allow more leeway for standard tax deductions, salary tax deductions and special deductions for people with disabilities, the firm said.
The last time the government revised deductions was in 2018 and the consumer price index has since grown 3.2 percent to 100.49, it said, suggesting that standard tax deductions should climb by NT$4,000 to NT$124,000, while salary tax deductions and special tax deductions for people with disabilities should be NT$206,000, an addition of NT$6,000.
The new formula would push up taxable income thresholds for different brackets, KPMG Taiwan said.
Furthermore, the government has to make greater concessions on inheritance and gift taxes, as the consumer price index has risen 10.9 percent since the last adjustment in 2009 at 93.49, the company said.
That means the inheritance tax allowance should rise from NT$12 million to NT$13.32 million, while gift tax deduction should grow from NT$2.2 million to NT$2.44 million a year to reflect inflation, it said.
The ministry said it has to wait for this month’s consumer price index data to confirm the need for adjustments and would disclose related figures in December at the latest.
FOUR DESIGNATED AREAS: Notices were issued for live-fire exercises in waters south and northwest of Penghu, northeast of Keelung and west of Kaohsiung, they said The military is planning three major annual exercises across the army, navy and air force this month, with the navy’s “Hai Chiang” (海強, “Sea Strong”) drills running from today through Friday, the Ministry of National Defense said yesterday. The Hai Chiang exercise, which is to take place in waters surrounding Taiwan, would feature P-3C Orion maritime patrol aircraft and S-70C anti-submarine helicopters, the ministry said, adding that the drills aim to bolster the nation’s offshore defensive capabilities. China has intensified military and psychological pressure against Taiwan, repeatedly sending warplanes and vessels into areas near the nation’s air defense identification zone and across
FORCED LABOR: A US court listed three Taiwanese and nine firms based in Taiwan in its indictment, with eight of the companies registered at the same address Nine companies registered in Taiwan, as well as three Taiwanese, on Tuesday were named by the US Department of the Treasury’s Office of Foreign Assets Control (OFAC) as Specially Designated Nationals (SDNs) as a result of a US federal court indictment. The indictment unsealed at the federal court in Brooklyn, New York, said that Chen Zhi (陳志), a dual Cambodian-British national, is being indicted for fraud conspiracy, money laundering and overseeing Prince Holding Group’s forced-labor scam camps in Cambodia. At its peak, the company allegedly made US$30 million per day, court documents showed. The US government has seized Chen’s noncustodial wallet, which contains
SUPPLY CHAIN: Taiwan’s advantages in the drone industry include rapid production capacity that is independent of Chinese-made parts, the economic ministry said The Executive Yuan yesterday approved plans to invest NT$44.2 billion (US$1.44 billion) into domestic production of uncrewed aerial vehicles over the next six years, bringing Taiwan’s output value to more than NT$40 billion by 2030 and making the nation Asia’s democratic hub for the drone supply chain. The proposed budget has NT$33.8 billion in new allocations and NT$10.43 billion in existing funds, the Ministry of Economic Affairs said. Under the new development program, the public sector would purchase nearly 100,000 drones, of which 50,898 would be for civil and government use, while 48,750 would be for national defense, it said. The Ministry of
SENATE RECOMMENDATION: The National Defense Authorization Act encourages the US secretary of defense to invite Taiwan’s navy to participate in the exercises in Hawaii The US Senate on Thursday last week passed the National Defense Authorization Act (NDAA) for Fiscal Year 2026, which strongly encourages the US secretary of defense to invite Taiwan’s naval forces to participate in the Rim of the Pacific (RIMPAC) exercise, as well as allocating military aid of US$1 billion for Taiwan. The bill, which authorizes appropriations for the military activities of the US Department of Defense, military construction and other purposes, passed with 77 votes in support and 20 against. While the NDAA authorizes about US$925 billion of defense spending, the Central News Agency yesterday reported that an aide of US
RSS