《TAIPEI TIMES 焦點》 Property tax draft still in Cabinet

POINTING FINGERS: The minister of finance said high housing prices were behind the crash of the real-estate market, not his proposed capital gains tax on property

By Crystal Hsu / Staff reporter

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The Cabinet is likely to tighten terms for planned capital gains taxes on property, as the Ministry of Finance’s draft has been criticized as being too lenient, Minister of Finance Chang Sheng-ford （張盛和） said yesterday.

The draft, intended to make property gain taxes “more reasonable,” remains with the Cabinet, which might soon give its approval after making some adjustments, Chang told a meeting of the legislature’s Finance Committee in Taipei.

Legislators said the Cabinet intends to raise the proposed tax rate, narrow tax breaks and manage past transactions.

“If there will be adjustments, they will surely aim to tighten the terms in the ministry’s version, which many criticize as too lenient,” Chang said.

The ministry in February suggested a flat 17 percent tax rate on property gains from homes sold for NT$40 million （US$1.3 million） or more. The rate would rise to 30 percent on homes sold within two years of purchase.

Academics and civic groups have panned the draft, saying that the ministry’s version would target only a few luxury homes, given that more than 95 percent of homes in Taiwan are worth less than NT$40 million.

Critics have instead called for a tax break capped at NT$1 million and levying a tax rate of 20 percent on gains in excess of NT$1 million and an even higher rate for short-term transactions.

Chang would not confirm which adjustments were being considered, but he did say that some did propose such changes and the Cabinet is expected to finalize the details soon.

Chang dismissed reports that the tax plans are to blame for sluggish property transactions, saying that he introduced the tax plan in February, but the market started to lose steam last year.

“It is unaffordable housing prices that are slowing transactions,” Chang said, adding that the market has rallied for more than a decade and it is time to take a break.

He also directed the taxation agency in Taipei to look into inheritance disputes over Formosa Plastics Group （台塑集團） founder Wang Yung-ching’s （王永慶） estate, as Wang’s eldest son, Winston Wong （王文洋）, is suing the family for allegedly hiding a fortune estimated at US$15 billion.

Chinese Nationalist Party （KMT） Legislator Lo Ming-tsai （羅明才） said the Treasury is entitled to half the fortune, given the inheritance tax rate of 50 percent in effect when Wang Yung-ching died.

The government cut the tax to a flat 10 percent in 2009 to curb tax evasion and facilitate capital repatriation.

The tax cut has not had a negative impact on inheritance tax revenues, which rose to NT$40.33 billion last year from NT$22.33 billion in 2009, Chang said, adding that the figure was less than NT$30 billion before the tax cut.

新聞來源：TAIPEI TIMES