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.
Taiwan is projected to lose a working-age population of about 6.67 million people in two waves of retirement in the coming years, as the nation confronts accelerating demographic decline and a shortage of younger workers to take their place, the Ministry of the Interior said. Taiwan experienced its largest baby boom between 1958 and 1966, when the population grew by 3.78 million, followed by a second surge of 2.89 million between 1976 and 1982, ministry data showed. In 2023, the first of those baby boom generations — those born in the late 1950s and early 1960s — began to enter retirement, triggering
ECONOMIC BOOST: Should the more than 23 million people eligible for the NT$10,000 handouts spend them the same way as in 2023, GDP could rise 0.5 percent, an official said Universal cash handouts of NT$10,000 (US$330) are to be disbursed late next month at the earliest — including to permanent residents and foreign residents married to Taiwanese — pending legislative approval, the Ministry of Finance said yesterday. The Executive Yuan yesterday approved the Special Act for Strengthening Economic, Social and National Security Resilience in Response to International Circumstances (因應國際情勢強化經濟社會及民生國安韌性特別條例). The NT$550 billion special budget includes NT$236 billion for the cash handouts, plus an additional NT$20 billion set aside as reserve funds, expected to be used to support industries. Handouts might begin one month after the bill is promulgated and would be completed within
NO CHANGE: The TRA makes clear that the US does not consider the status of Taiwan to have been determined by WWII-era documents, a former AIT deputy director said The American Institute in Taiwan’s (AIT) comments that World War-II era documents do not determine Taiwan’s political status accurately conveyed the US’ stance, the US Department of State said. An AIT spokesperson on Saturday said that a Chinese official mischaracterized World War II-era documents as stating that Taiwan was ceded to the China. The remarks from the US’ de facto embassy in Taiwan drew criticism from the Ma Ying-jeou Foundation, whose director said the comments put Taiwan in danger. The Chinese-language United Daily News yesterday reported that a US State Department spokesperson confirmed the AIT’s position. They added that the US would continue to
IMPORTANT BACKER: China seeks to expel US influence from the Indo-Pacific region and supplant Washington as the global leader, MAC Minister Chiu Chui-cheng said China is preparing for war to seize Taiwan, Mainland Affairs Council (MAC) Minister Chiu Chui-cheng (邱垂正) said in Washington on Friday, warning that Taiwan’s fall would trigger a regional “domino effect” endangering US security. In a speech titled “Maintaining the Peaceful and Stable Status Quo Across the Taiwan Strait is in Line with the Shared Interests of Taiwan and the United States,” Chiu said Taiwan’s strategic importance is “closely tied” to US interests. Geopolitically, Taiwan sits in a “core position” in the first island chain — an arc stretching from Japan, through Taiwan and the Philippines, to Borneo, which is shared by
RSS