The Cabinet next year is to give tax exemptions to low-income young people, families with two children and trigenerational households to relieve economic burdens, Premier Cho Jung-tai (卓榮泰) said yesterday.
He made the comments at a post-Cabinet meeting news conference in Taipei announcing next fiscal year’s general budget.
The government is to increase the maximum allowable sum of income tax reductions, including the cost of living, standard deductions and special deductions, in addition to income bracket adjustments to reduce financial strain, he said.
Photo: CNA
The limit to special deductibles for raising children and rents would also be raised, with the latter being reclassified as a special deduction, Cho said.
The allowance for the basic cost of living is to increase by NT$3,000 (US$98.34), and the maximum sum of deduction allowable for long-term care is increased to NT$180,000, he said.
This means young people living in rented apartments and earning a wage of less than NT$620,000 per year, households with two dependent children earning less than NT$1,641,000 per year, and trigenerational families earning less than NT$2,124,000 per year are fully exempted from paying income tax, he said.
The Legislative Yuan on Thursday last week passed amendments to the Income Tax Act (所得稅法), which are to go into effect when the government collect taxes in May next year.
Meanwhile, the new budget proposal does not include pay adjustments for military personnel, civil servants and public-school teachers for the sake of equality, Cho said.
When the budget is formally submitted, the Executive Yuan would seek constitutional judgements for two pieces of legislation — the Police Personnel Management Act (警察人員人事條例) and Pay Act of the Armed Forces (軍人待遇條例) — and adjust it depending on those results, Cho said.
The government has spared no effort in providing for civil servants and military personnel, Cho said, adding that this year’s supplementary budget already includes funding for military benefits set to increase next year.
In January, the Legislative Yuan passed amendments to the Police Personnel Management Act that raised the monthly income replacement ratio for police, firefighters, coast guard personnel, National Immigration Agency officers and airborne service personnel.
The amendments set the monthly income replacement ratio at 43.25 percent for those in service for 15 years, with the ratio going up by 1.75 percentage points per year until they reach 80 percent at 36 years of service.
In June, lawmakers passed amendments to the Pay Act of the Armed Forces that provide a NT$30,000 monthly allowance for voluntary military service members and higher salaries for those in combat units.
However, the Cabinet did not include the adjustments from the two acts into the budget due to the controversies surrounding them, Cho said.
If necessary, retroactive payments would be issued, Cho added.
There have been three pay raises in four years for military personnel and public servants, accounting for an 11 percent increase altogether, leading some to worry that another pay raise while the government takes on debt would create negative public opinion, people familiar with the matter said.
The slowdown in economic growth, amendments to the Act Governing the Allocation of Government Revenues and Expenditures (財政收支劃分法), US tariffs and a nationwide NT$10,000 cash handout are factors that have been taken into account, Executive Yuan spokeswoman Michelle Lee (李慧芝) said.
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