Fri, Aug 09, 2024 page1

• Executive Yuan agrees to boost appliance subsidy

  TAX POLICY: The government is considering raising the minimum tax rate on corporate profit and lowering the amusement tax, Finance minister said

  • By Chung Li-hua / Staff reporter, with CNA
  • • 
    • 
    • 

  The Executive Yuan yesterday agreed to increase funding for a program to subsidize the replacement of old home appliances with new, energy-efficient models.

  The Ministry of Economic Affairs since last year has been subsidizing purchases of energy-saving home appliances, such as refrigerators and air-conditioners.

  The ministry said that it has allocated NT$10.1 billion (US$309.88 million) to subsidize such purchases.

  

  A woman looks at air-conditioners at a store in Kaohsiung in an undated photograph.

  Photo: CNA

  Only NT$700 million was left for the program as of last month, it said.

  Premier Cho Jung-tai (卓榮泰) at a Cabinet meeting instructed that NT$2.1 billion be added to the ministry’s coffers to continue the program until the end of this year, Deputy Minister of Economic Affairs Lien Ching-chang (連錦漳) told a news conference after the meeting.

  The ministry would continue the program next year and in 2026 by budgeting an additional NT$13.6 billion for it, Lien said.

  “The goal is to replace 7.3 million old home appliances from last year to 2026 with models that conserve energy. Collectively, they could help save 4.4 billion kilowatt-hours of electricity,” he said.

  To qualify for the subsidy, people must remove old refrigerators and air-conditioners and replace them with new ones, the ministry said.

  The subsidy is NT$3,000 per machine, it said.

  The Ministry of Finance since 2019 has offered tax refunds for people who buy energy-conserving home appliances.

  They are entitled a tax refund of up to NT$2,000 for each machine they purchase, making total savings from the ministries’ programs potentially NT$5,000 per machine.

  The tax refund plan expires on June 14 next year.

  The Executive Yuan also approved a Ministry of Economic Affairs plan to expand efforts to save energy, with NT$35.3 billion to be spent over the next four years to conserve 20.6 billion kilowatt-hours of electricity.

  The plan, which offers incentives to save energy for electricity users in three categories — high, medium and low — aims to generate investment in energy-saving facilities topping NT$326.6 billion.

  In other news, Minister of Finance Chuang Tsui-yun (莊翠雲) on Wednesday said that the government is considering raising the minimum tax rate on corporate profit to 15 percent from 12 percent and would lower aspects of the amusement tax.

  The increase in corporate tax would bring Taiwan in line with a global minimum policy introduced by the Organisation for Economic Co-operation and Development (OECD), which advocates a 15 percent tax rate on profit at multinational companies.

  The formulation of supplementary measures, including preferential tax plans, would be further discussed to avoid affecting small and medium-sized enterprises (SME), Chuang said.

  The OECD’s policy is aimed at ensuring that large multinational enterprises with revenue of more than 750 million euros (US$817 million) are subject to a 15 percent effective minimum tax rate regardless of where they operate.

  Many countries are taking steps to implement the 15 percent policy and Taiwan aims to keep “on track,” Chuang said.

  The minimum taxation component, known as the Pillar 2 Directive, has been part of OECD international tax policy since about 140 countries in the OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting struck a landmark agreement in October 2020.

  However, there is a difference between the calculation methods of the global minimum system and Taiwan’s basic tax regime for private enterprises, Chuang said.

  If Taiwan wants to be in line with international tax standards, it must “comply with the OECD’s norms and use the same standards,” she said.

  The Ministry of Finance is “collecting international data” and “developing relevant proposals,” Chuang said.

  If Taiwan joins the OECD global tax deal, Taiwanese companies with consolidated revenue exceeding NT$26.75 billion would be eligible for the new 15 percent tax rate, she said.

  There are about 100 enterprises that would be affected by the new tax rules, the ministry said.

  To avoid affecting SMEs, domestic companies with revenue of less than NT$26.75 billion are expected to continue to be subject to the current 12 percent tax rate, Chuang said.

  In other matters, the ministry and local governments at a meeting on July 10 reached an agreement to lower aspects of the amusement tax, Chuang said.

  Regulations for the amusement tax stipulate maximum rates on entertainment-related commercial activities that can be imposed by local governments.

  The maximum rate of 30 percent for entertainment venues, facilities or activities — including professional singing, storytelling, dancing, circuses, magic shows, acrobatics shows and nightclub performances — would be lowered to 15 percent, Chuang said.

  In addition, the maximum 60 percent tax levied on cinema tickets and 30 percent for Chinese-language films would be lowered to 15 percent, she said.

  The tax of up to 20 percent on tickets or fees at golf courses would remain unchanged, she said.

  Regarding investment taxation, the government would extend a tax cut on day-trading transactions through the end of 2027.

  The cut — which reduces taxes on traders buying stock and selling it in the same session to 0.15 percent from 0.3 percent — had been set to expire on Dec. 31.
• Most Popular

  • 1

    Chinese technicians join airport MRT project

  • 2

    A train for whom? Is a new monorail helpful for Cairo?

  • 3

    Apple is giving Intel’s turnaround some momentum

  • 4

    Uncrewed US craft transits the Taiwan Strait

  • 5

    Starlux to expand long-haul flight offerings