《TAIPEI TIMES》 Tax break on living expenses increased
The logo of the Ministry of Finance is pictured in Taipei in an undated photograph. Photo: Clare Cheng, Taipei Times
HISTORIC ADJUSTMENT: Taxpayers would be able to see the extra tax break — NT$40,000 for a family of four — in May when filing for income earned this year
By Crystal Hsu / Staff reporter
The Ministry of Finance yesterday raised the threshold for the basic living expenses deduction this year by NT$10,000 (US$357.97) to NT$192,000, which would ease the tax burden of more than 2 million people.
The ministry announced the adjustment — the biggest in the nation’s history — on its Web site, justifying the tax break by citing the 2017 Taxpayer Rights Protection Act (納稅者權利保護法), which stipulates that people should not be taxed on the amount they need to cover basic expenses.
Each year, the figure for basic expenses is set at 60 percent of the median disposable income from the preceding year.
A survey of household incomes released on Aug. 13 by the Directorate-General of Budget, Accounting and Statistics (DGBAS) placed this year’s median disposable income at NT$320,000, making the basic living expense NT$192,000.
The deduction, which can be applied to taxpayers and each of their dependents, is NT$10,000 more than last year.
While the upward adjustment is expected to benefit 2.29 million people, it would lower the nation’s tax income by NT$14.64 billion, the ministry said.
Taxpayers would be able to see the difference in May next year, when filing their taxes for income earned this year, it added.
The extra tax break would amount to NT$40,000 for a family of four, the ministry said.
The savings could vary from NT$2,000 to NT$16,000, depending on a person’s tax bracket, which ranges from 5 percent to 40 percent, it added.
Later this year, the ministry is expected to increase other income tax deductions to reflect mounting inflationary pressure linked to the consumer price index (CPI).
The inflation gauge has risen more than 3 percent in the past three years, meriting bigger tax breaks so that people feel less of a pinch, accounting firms have said.
Income tax laws obligate the government to make adjustments based on the average CPI data for the year ending this month.
Last month, the CPI picked up 2.63 percent, and could remain high due to the soaring prices worldwide for fuel and raw materials, the DGBAS said previously.
Escalating inflation means that the government must allow more leeway for standard tax deductions, salary tax deductions and special deductions for people with disabilities.
The government must also make greater concessions on inheritance and gift taxes — from NT$12 million to NT$13.32 million per year on inheritance tax deductions and from NT$2.2 million to NT$2.44 million per year on gift tax deductions.
In related news, the ministry concurs with the Ministry of Economic Affairs that a sales tax exemption on electric vehicle purchases should be extended for four more years.
The tax break was due to expire by the end of this year, but the government aims to keep the incentive to encourage the migration to electric vehicles, Deputy Minister of Finance Lee Ching-hua (李慶華) said on the sidelines of a public function yesterday.
新聞來源:TAIPEI TIMES
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