Taipei, June 16, 2008 (CENS)--In line with the expiration of the Statute for Industrial Upgrading at the end of 2009, the government will step up tax reform cutting business income tax and enhancing special allowances for salaried persons, the handicapped, and education in consolidated personal income tax, according to Vice Premier Paul Chiu, who has been appointed by Premier Liu Chao-shiuan, to head the projected tax reform committee.

Chiu reported yesterday (June 15) that related legal revision for the changes in the taxation system will be completed by the end of June next year and put into force from January 2010.

The changes in the taxation system, said Chiu, will be carried out by the projected tax reform committee, which will consist of over 20 representatives from the government, business community, social-movement organizations, and academia. The committee will convene monthly, with the first meeting scheduled at the end of this month.

Li Shu-the, minister of finance, remarked that the tax reform committee aims to achieve three main goals: providing more incentives pushing economic development, fair tax burden, and a taxation system conducive to sustainable development.

The campaign platform of President Ma Ying-jeou includes a number of major tax-reform proposals, including cutting business income tax to 20%, down from 25% now, scrapping the 10% tax on retained earnings, boosting the special allowances for salaried persons and the handicapped to NT$100,000 for both, up from NT$78,000 and NT$77,000, respectively now, enhancing education allowance to NT$25,000 per person, up from NT$25,000 per household now, and instituting a negative income tax system, according to which a four-member household with annual income reaching NT$360,000 will be entitled to an annual subsidy of NT$46,800.
(by Philip Liu)