The tax refund bill proposed by the opposition Democratic Progressive Party (DPP) has a slim chance of clearing the legislature this session as ruling lawmakers doubted it was necessary, though some agreed it could help boost private consumption.
The legislature’s Finance Committee is scheduled today to take up the bill, which seeks to allow taxpayers with an annual income of NT$495,000 (US$16,300) or less to obtain a tax refund of NT$6,000 from last year’s income tax.
The draft also calls for couples who earn NT$995,000 or less a year to get another NT$6,000 refund and an extra NT$4,000 for each of their dependents. It further proposes awarding a NT$4,000 subsidy to people who live below the poverty line.
DPP legislator Gao Jyh-peng (高志鵬) said the measure would be more effective in expanding domestic demand than the stimulus package introduced by the Chinese Nationalist Party (KMT) administration.
The Cabinet has proposed a special budget of NT$130.1 billion (US$4.28 billion) to help local governments finance a variety of spending programs, with a view to raising the GDP growth by 0.45 percent to 4.78 percent this year.
“It would be more effective for the government to encourage consumer spending by giving the money to the people directly,” Gao said in a telephone interview.
Gao said the tax refund program would cost over NT$60 billion. He said the government could pay for it with surplus tax revenues as it had collected more taxes than projected in recent years, the DPP lawmaker said.
“The government could also opt to ditch the stimulus plan and use the money to fund the tax refunds instead,” Gao said.
Gao admitted that the tax refund bill was unlikely to make headway as the ruling party controls a solid majority in the lawmaking body.
KMT caucus whip Lin Yi-shih (林益世) said the ruling and opposition parties remained divided on the issue, and the review today would be limited to a general discussion to avoid conflict.
KMT lawmaker Lee Hung-chun (李鴻鈞) said he had reservations about the proposed tax refund. Like a stimulant, Lee said the proposed tax refund, while promising immediate relief, would prove no lasting remedy to lift consumer confidence.
The nation’s consumer confidence index dropped last month to its lowest point since November 2001 because of rising commodity prices and bearish stock market sentiment, the National Central University’s Research Center for Taiwan’s Economic Development reported on June 27.
“People will shy away from spending if fuel and food prices keep rising and their income remains unchanged,” Lee said by telephone.
He said it was more urgent for the government to adopt measures to contain inflation and boost economic growth, but that the tax refund would serve neither purpose.
Norman Yin (殷乃平), a professor from the Money and Banking department at National Chengchi University, agreed for different reasons.
Yin said the tax refund plan, while positive on consumer spending, would contribute little to GDP growth. Like extra social welfare windfall for the poor, Yin said, the measure would add strain to the nation’s fiscal health with national debts hitting NT$4 trillion already and expected to climb.
The government has proposed funding the stimulus plan with borrowed money, after the Ministry of Finance’s previous proposal to sell shares of Chunghwa Telecom Co (中華電信) to help fund the spending was stalled in the legislature last month.
‘SWASTICAR’: Tesla CEO Elon Musk’s close association with Donald Trump has prompted opponents to brand him a ‘Nazi’ and resulted in a dramatic drop in sales Demonstrators descended on Tesla Inc dealerships across the US, and in Europe and Canada on Saturday to protest company chief Elon Musk, who has amassed extraordinary power as a top adviser to US President Donald Trump. Waving signs with messages such as “Musk is stealing our money” and “Reclaim our country,” the protests largely took place peacefully following fiery episodes of vandalism on Tesla vehicles, dealerships and other facilities in recent weeks that US officials have denounced as terrorism. Hundreds rallied on Saturday outside the Tesla dealership in Manhattan. Some blasted Musk, the world’s richest man, while others demanded the shuttering of his
ADVERSARIES: The new list includes 11 entities in China and one in Taiwan, which is a local branch of Chinese cloud computing firm Inspur Group The US added dozens of entities to a trade blacklist on Tuesday, the US Department of Commerce said, in part to disrupt Beijing’s artificial intelligence (AI) and advanced computing capabilities. The action affects 80 entities from countries including China, the United Arab Emirates and Iran, with the commerce department citing their “activities contrary to US national security and foreign policy.” Those added to the “entity list” are restricted from obtaining US items and technologies without government authorization. “We will not allow adversaries to exploit American technology to bolster their own militaries and threaten American lives,” US Secretary of Commerce Howard Lutnick said. The entities
Minister of Finance Chuang Tsui-yun (莊翠雲) yesterday told lawmakers that she “would not speculate,” but a “response plan” has been prepared in case Taiwan is targeted by US President Donald Trump’s reciprocal tariffs, which are to be announced on Wednesday next week. The Trump administration, including US Secretary of the Treasury Scott Bessent, has said that much of the proposed reciprocal tariffs would focus on the 15 countries that have the highest trade surpluses with the US. Bessent has referred to those countries as the “dirty 15,” but has not named them. Last year, Taiwan’s US$73.9 billion trade surplus with the US
Prices of gasoline and diesel products at domestic gas stations are to fall NT$0.2 and NT$0.1 per liter respectively this week, even though international crude oil prices rose last week, CPC Corp, Taiwan (台灣中油) and Formosa Petrochemical Corp (台塑石化) said yesterday. International crude oil prices continued rising last week, as the US Energy Information Administration reported a larger-than-expected drop in US commercial crude oil inventories, CPC said in a statement. Based on the company’s floating oil price formula, the cost of crude oil rose 2.38 percent last week from a week earlier, it said. News that US President Donald Trump plans a “secondary
RSS