New tax cuts to benefit 1.49 million people in Taiwan

新減稅台灣149萬人受益

New tax cuts in Taiwan to benefit up to 1.49 million people


TAIPEI (Taiwan News) -- The Ministry of Finance (MOF) recently announced that an amendment to the Taxpayer Rights Protection Act will include a new category of tax deductions for family expenses which will benefit up to 1.49 million people, reported CNA.

The Taxpayer Rights Protection Act (TRPA) was passed by the Legislative Yuan in 2016 and implemented on Dec. 28 of 2017. The law is aimed at protecting the human rights of tax payers, safeguarding people's basic right to subsistence and achieving fair taxation and strict procedural justice.

The main spirit of TRPA is that taxes are not to be levied on expenses required to maintain the basic livelihood of taxpayers and their dependents. Basic living expenses are based on 60 percent of the median "disposable income per person in the country of the most recent year," announced the Directorate-General of Budget, Accounting and Statistics, which in 2017 were calculated at NT$166,000 (US$5,400) per person.

Taxpayers with a single source of income and a large number of dependents are expected to benefit the most from the new amendment. A family of four including two parents and two children would be able to deduct NT$664,000 (4 x NT$166,000) as basic living expenses.

There will also be deductions for pre-school children, school tuition, people with mental or physical disabilities, and savings and investment.

The new tax scheme is to be finalized in late October, after public opinion is taken into consideration over a 60-day period. If the new amendment is approved, it will take effect in May 2019.

After the new tax plan goes into effect, the average household is expected to save NT$2,845 a year, while the government will take in NT$4.256 billion less in tax revenue, reported Apple Daily.