President William Lai (賴清德) yesterday promulgated amendments to the Income Tax Act (所得稅法) that would reduce the tax burden on families with children, benefiting an estimated 2.37 million people and providing about NT$8 billion (US$252.86 million) in tax relief.
The Legislative Yuan on Aug. 23 passed an amendment to the act, raising the tax exemption threshold for dependent minors and expanding itemized deductions for social insurance premiums.
Lai yesterday promulgated the amendments to articles 17 and 126 of the act, including a 50 percent increase in the personal exemption for dependent minors, from NT$101,000 to NT$151,500, the Ministry of Finance said.
Photo: CNA
The revised law, which takes effect retroactively from Jan. 1, would also allow social insurance premiums to be fully deducted as itemized deductions in the same way as National Health Insurance (NHI) premiums, it said.
Social insurance programs — including Labor Insurance, Farmers’ Health Insurance, National Pension Insurance, and insurance schemes for military personnel, civil servants and teachers — form an integral part of Taiwan’s social security system and are generally mandatory by law, making them similar in nature to NHI, the ministry said.
Premiums paid for those programs would no longer be subject to the NT$24,000 cap on itemized deductions for insurance premiums, the ministry said.
The new provisions would take effect when taxpayers file their income tax returns for this year in May next year, the ministry said.
The amendments are part of the government’s efforts to address Taiwan’s declining birthrate under the Executive Yuan’s new population strategy.
The Executive Yuan proposed the amendment on June 25 to alleviate financial pressure on families raising children and create a more family-friendly tax environment.
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