Taiwanese Teachers, Soldiers To Lose Tax Breaks

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

12 May 2010

An amendment bill which, if passed into law, could remove the income tax exemptions currently in place for the country's teachers and military servicemen has made progress through the Taiwanese parliament’s finance committee.

The decision to reverse the tax exemption, which has been in place for several decades to offset the low wages earned by teachers and soldiers, has been discussed for some time. The government has previously defended its position, stating that improvements to the livelihoods of teachers and soldiers in recent years puts them on an even footing with other professionals required to pay tax.

The amendment will still need the final approval of the Legislative Yuan, but it is planned to have effect from January 2011. The move will affect up to 340,000 military professionals and individuals within both the primary and elementary teaching sectors.

The government estimates that the tax reversal could net them an extra TWD11bn (USD349m) in annual revenues. It is said that over TWD7bn will be payable by teachers, with the remainder from the military. There have been promises that the additional revenue will be allocated to the respective government spending departments.

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