Taipei, The Ministry of Finance (MOF) is planning to amend the Taxpayer Rights Protection Act later this year to introduce tax cuts that are expected to benefit some 1.49 million people when they file their returns next May.
In a notice of the draft amendment, the ministry proposed a new category of tax deductions for family expenses, which it said can be used to calculate a non-taxable amount that can be added to the standard deductions.
The MOF's plan is expected to be hammered out in October, after the 60-day period of notice during which public opinion will be solicited.
If the plan is approved, it will take effect in time for the next tax filing period in May 2019, and approximately 1.49 million people will see a reduction in taxes, the ministry said.
The existing Taxpayer Rights Protection Act was amended in December 2017, raising the standard tax deductions for wage earners from NT$90,000 to NT$120,000 (US$3,044 to US$4,059) and the "special deductions" from annual salaries from NT$128,000 to NT$200,000.
In addition, special deductions were introduced for people with physical or mental disability, for pre-school children, and for school tuition, savings and investment.
Basic living expenses are defined by the relevant authority as 60 percent of the median rate of the expenditure per person annually and were calculated at NT$166,000 (US$5,402) in 2017.
If the new proposed tax cuts are implemented as planned in May 2019, they will cost the government an estimated NT$4.256 billion per year in tax revenue.
Source: Focus Taiwan News Channel