The Executive Yuan yesterday advanced proposed increases to the tax-exempt income threshold for some categories, as well as expanded tax deductions for energy-efficient appliances, sugar-free beverages and upgrading to new vehicles.
The Ministry of Finance presented the planned tax breaks and deductions at a Cabinet meeting, with the changes, if approved, to take effect next year.
The adjustments are needed to reflect changes in the cost of living, the ministry said.
Photo: CNA
Individual income tax exempt thresholds for filing in 2027 would be increased by NT$4,000 (US$127.63) to NT$101,000 and to NT$151,500 for people aged 70 or older, it said.
The thresholds would be NT$136,000 for single people and NT$272,000 for married couples, increases of NT$5,000 and NT$10,000 respectively, the ministry said.
The tax-exempt threshold for annual income for people living alone in rented properties would rise to NT$644,000, it said.
The threshold would be raised to NT$1.108 million for dual-income families living in rented properties without children, and NT$1.685 million for dual-income families living in rented properties with two or more children under six years old, it said.
Taxpayers who earn NT$590,000 or more annually would on average receive tax breaks totaling NT$20,000, while the average for those earning at least NT$1.33 million would be NT$50,000, the ministry said.
The average for those earning NT$2.66 million or more would be NT$110,000 and NT$210,000 for those making at least NT$4.98 million annually, it said.
The tax breaks are estimated to cut NT$14.4 billion from tax revenue and would apply to 6.96 million families, it said.
In addition, the annual income exemption threshold for families with one elderly member qualifying for long-term care deductibles and two or more children under six would be raised to NT$2.1835 million, it said.
The deductions for elderly dependents with long-term care needs would increase to NT$180,000 from NT$120,000, the ministry said.
Special deductions for low-income families and people with physical or mental disabilities would increase to NT$227,000, it said.
Excise tax exemptions would be applied to purchases of energy-efficient appliances and vehicles to reduce the burden on families, promote sustainability and stimulate the economy, the ministry said.
Purchases of refrigerators, air-conditioners and dehumidifiers with class 1 or 2 energy-saving ratings made between June 15 and Dec. 31, 2029, would qualify for up to NT$2,000 in excise rebates, it said.
The measure is expected to save consumers a combined NT$4.11 billion, as well as 515 million kilowatt-hours in reduced electricity use, it added.
Purchases of new cars with an engine displacement of up to 2,000cc would qualify for excise rebates of up to NT$50,000 and purchases of motorcycles with engine displacements under 150cc would qualify for rebates of up to NT$2,000, it said.
The rebates are cumulative with those for trading in old motor vehicles, with buyers of small cars able to save up to NT$100,000 and up to NT$6,000 for motorcycles, it said.
The implementation period for tax rebates on replacing aging motor vehicles would be extended for another five years to the end of 2030, it said, adding that combined savings for people who buy vehicles are estimated at NT$25.4 billion.
Commodity tax breaks for electric vehicles would also be extended by five years, assuming that the legislature approves amendments to the Commodity Tax Act (貨物稅條例) and the Vehicle License Tax Act (使用牌照稅法), the ministry added.
The bill is to be sent to the legislature for review.
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