The Cabinet yesterday approved draft amendments to the Income Tax Law (
Soldiers and teachers of junior high schools and down have been exempted from paying the income tax since 1955. The draft amendments will proceed to the Legislative Yuan for further review and, it is hoped, for final approval.
The Cabinet wants the legislature to pass the draft amendments during the next legislative session so that the changes can go into effect next January.
It is estimated that the change would affect about 300,000 soldiers and teachers and bring in about NT$13 billion annually.
The catch, however, is that the Cabinet might also increase the salaries of soldiers and teachers in a bid to compensate them for their financial losses.
At a press conference held after the weekly closed-door Cabinet affairs meeting yesterday morning, Cabinet spokesman Chuang Suo-hang (莊碩漢) said that the amendments to the Income Tax Law are necessary.
"When the law was enacted some 50 years ago, the government offered such incentives to encourage people to teach in schools or join the military," Chuang said.
As soldiers and teachers are becoming better off than their counterparts in other sectors of the economy and are no longer classified as low-income groups, more and more people have been calling for the cancellation of such privileges over the past 10 or 20 years, Chuang said.
Statistics show that a 14th ranking lieutenant general earns as much as NT$85,600 a month and a school principle can make as much as NT$67,000 a month.
Chuang emphasized that the government would compensate for the financial losses of the teachers and military personnel concerned.
"The premier has made it clear that the government's policy is to compensate for the financial losses of those negatively affected by the change," Chuang said. "A salary hike is not a bad idea to take care of the problem, but it may take time to hammer out the details."
The Ministry of Education said yesterday that it may use the additional money to increase teachers' salaries and research expenses in addition to improving school facilities. Estimates are that the ministry will receive an additional annual income of NT$7 billion after of the change.
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