Taiwan's Revenue Collection Down 40%

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

12 June 2002

Taiwan's Ministry of Finance announced on Monday that tax revenue for May was down almost 40% on the previous year.

Speaking at a news conference, Director General of the Finance Ministry's Department of Statistics, Hsu Kuo-chung explained that: 'The shortfall is most likely a result of last year's economic recession, factory closures, rising unemployment and tax cut measures, as well as compensation for the victims of natural disasters.'

Mr Hsu told journalists that last month's tax revenue total (NT$565 billion) represented a drop of NT$95.5 billion from last May's cumulative tax income. However, he predicted that the shortfall should narrow slightly next month: 'since tax revenue charged to taxpayers' credit cards or bank accounts may increase by NT$10 billion to NT$20 billion by then'.

According to a recent report in the Tapei Times, although the Finance Ministry is mapping out a raft of tax reform measures designed to rescue the ailing economy, proposals such as an increase in the 5% business tax rate are likely to meet with fierce opposition, both politically and from taxpayers.

President Chen Shui-bian's pre-election promise not to increase taxes during his tenure is also likely to complicate the already grim situation.

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