People with an annual income of NT$620,000 (US$20,495) or less would be exempt from income tax when filing taxes in May next year, President William Lai (賴清德) said on Sunday, although a Chinese Nationalist Party (KMT) legislator said such an exemption already existed.
The exemption would benefit 40 to 50 percent of the population, making this year the year with the “lightest tax burden” in the nation’s history, Lai said, adding that the majority of income tax would be paid by the top 1 percent of earners.
Democratic Progressive Party caucus secretary-general Chen Pei-yu (陳培瑜) yesterday said that the tax cuts still need to be discussed with the Ministry of Finance and require comprehensive supporting measures.
Photo: Tyrone Siu, Reuters
However, the policy was met with doubt by the opposition party, with KMT Legislator Hsu Yu-chen (許宇甄) calling it empty political rhetoric, essentially using the existing system to deceive the public.
This year’s exemptions and deductions already include a personal exemption of NT$97,000, a standard deduction of NT$131,000, a salary deduction of NT$218,000 and a rental deduction of NT$180,000, totaling NT$626,000 per taxpayer, Hsu said.
Tax exemptions for those earning NT$50,000 per month have been in effect since the tax filings for last year, she said.
Taiwan’s tax structure is highly imbalanced, she said, adding that Ministry of Finance data showed that in 2023, 43.8 percent of the 6.883 million income tax filings were tax-exempt.
About 64,000 households, or 0.93 percent of all households nationwide, had net taxable income — total income minus exemptions and deductions — of more than NT$5 million, which accounted for NT$207.9 billion or 43.3 percent of income tax revenue, including dividend taxes, Hsu said.
Therefore, less than 1 percent of wealthy households paid more than 40 percent of total income tax revenue for 2023, Hsu said.
The data also reflected low incomes across the nation, she said.
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