Minister of Finance Lee Yung-san (
The DPP legislative caucus said later in the day it will help remove resistance to the policy change -- which it characterized as long overdue -- to make the nation's taxation system more fair.
Lee said if all goes well, the long-standing tax privilege for service members and schoolteachers will be scrapped, effective Jan. 1.
The finance ministry has been working on the planned tax reform for quite a while, he said, adding that a bill to achieve the purpose will be turned over to the Legislative Yuan for review when the body reconvenes next month.
Asked when the new measure will go into effect, Lee said it will depend on the legislature, which has a final say on the matter.
"The tax exemption can only be abolished after the lawmaking body gives its go-ahead," he said.
The minister said the revenue generated from the axing of the tax exemption will be used to pay military service members and schoolteachers, whose salaries have not been raised in recent years.
The proposed tax reform measure is expected to increase the government's tax revenues by about NT$13.3 billion in the first year of implementation.
Lee quoted Premier Yu Shyi-kun as saying that the extra tax revenue should be used for those who suffer most from the new measure.
He said the Ministry of Finance has not drawn up a salary adjustment plan for military service members and schoolteachers, but the task should be done very soon.
The government has sought to scrap the income tax exemption but is hesitant in taking any concrete action for fear of alienating the two groups.
A breakthrough came earlier this year after the ministries of National Defense and Education, the main opponents of the tax reform, agreed to relent.
The latter changed its position after the government promised to spend part of the increased revenue on various education programs.
The DPP, which has long frowned on the tax exemption, said it would do all it can to help push the reform through the legislature.
DPP legislative whip Wang Tuoh (
The privilege is aimed at attracting people to become military service members and schoolteachers whose salaries are lower than those of workers employed by the private sector.
"Over the years, the situation has reversed," Wang said. "Today, many envy the two groups, whose jobs are considered well-paid and undemanding."
He praised President Chen Shui-bian (
The caucus will help convince the public on the need for change, Wang said.
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