The government’s tax reform committee yesterday reached a preliminary consensus to impose an environment and energy levy by integrating 13 existing taxes to help cut greenhouse gas emissions and encourage energy conservation.
Deputy Minister of Finance Chang Sheng-ford (張盛和) told reporters after the meeting that the proposed tax would not be a new levy but would integrate different pollution and waste disposal fees, as well as commodity and fuel taxes, into a single levy.
“All members voiced their support for a tax that would not boost the national treasury but keep it steady after its implementation,” Chang said.
Business representatives who had opposed the proposal softened their stance after gaining a better understanding of the issue, the vice minister said.
Chang said the committee, consisting of government officials, academics and business representatives, backed the government’s target to lower carbon emissions by 25 percent in 10 years.
To achieve that aim, Shaw Dai-gee (蕭代基), president of Chung-Hua Institution for Economic Research (中經院) and a committee member, suggested a tax reform plan under which the government would add a green tax to existing gasoline costs each year for the next 10 years. Assuming a green tax of NT$1.46 were added to current commodity taxes, vehicle fuel and other related fees, the proposed tax would amount to NT$11.01 in the first year and rise to NT$24.17 in the 10th year, Shaw said in a report.
Shaw said that fuel prices following the reform should not exceed those in South Korea or Japan, the nation’s main trade rivals.
After-tax oil costs in Taiwan stood at NT$20.68 per liter in December, compared with NT$34.50 in South Korea and NT$45.06 in Japan, the report said.
If realized, the green reform would generate NT$50.4 billion (US$1.53 billion) in tax revenues in the first year and NT$810 billion in the 10th year, a preliminary report showed.
The deputy minister said the government would use the money to scrap or lower a number of taxes. The government is mulling axing taxes on rubber tires, drinks and electric appliances. It also plans to abolish entertainment and stamp taxes.
Chang said the task force needed more time to finalize details and complementary measures.
Vice Premier Paul Chiu (邱正雄), head of the reform committee, suggested the panel give more thought on whether to tax nuclear energy and how.
The committee earlier said it could wrap up the discussion in late October. The ad hoc panel is due to disband at the end of this year.
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