Taiwan Forms Tax Reform Study Group

by Mary Swire, Tax-News.com, Hong Kong

22 February 2012

Christina Liu, the new Minister of Finance, has confirmed that a task force will be convened towards the end of next month by Taiwan’s Premier Sean Chen, to help examine and propose tax reform policies.

It is suggested that the tax experts in the task force, from the government, universities and private business associations, will be arranged in groups to look at different parts of the tax code, and will hold open meetings throughout Taiwan to sound out public opinion.

It is also expected the group would be charged with the formulation of tax policies with a dual objective – to provide additional budgetary revenues and to close a widening wealth gap in the Taiwanese economy.

The imposition of the luxury tax on speculative property purchases, from June last year, could be said to have been the first part of such a policy package, as is the indication that the government will, over time, change the basis of calculation of property taxes from officially-assessed to actual (and higher) market values. Other measures that have been mentioned include a capital gains tax on profits from stock exchange transactions and a windfall tax on businesses or individuals with above-average profits or incomes.

In addition, the new group will examine the experience of other countries and consider all possibilities therefrom, but it has been emphasized that new or further taxation would not be introduced unless the government was sure that it was acceptable to voters.

Liu has said that she is hopeful that the new government’s first tax reform package, arising out of the task force’s deliberations, will be available in September this year, giving the experts six months to complete their deliberations.

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