The Ministry of Finance is expected to raise income tax deductions by the end of this year to ease the tax burden on income earners next year, as consumer prices have grown beyond the trigger point since previous adjustments.
Taiwanese file their income taxes in May each year for income earned the previous calendar year.
Assorted tax deductions are linked to the consumer price index, which has risen more than 3 percent over the past three years.
That increase qualifies for upward revisions to the allowances by the government so people would feel less of the pinch, KPMG Taiwan said.
The inflationary gauge last month picked up 2.63 percent from a year earlier, the highest in eight-and-a-half years, and might gain further momentum on the back of steep increases in global oil and raw material prices, the Directorate-General of Budget, Accounting and Statistics said last week.
Income tax laws obligate the Ministry of Finance to make adjustments based on the average 12-month consumer price index data ending this month, the accounting firm said.
As of last month, the consumer price index had advanced 4.04 percent to 103.72, from the last revision at 99.69 in 2017, KPMG Taiwan said.
The chances of an upward adjustment are high, if not utterly necessary, the company said, adding that a consumer price index increase of 4 percent would mean an extra deduction of NT$4,000 (US$142.62) from taxable income.
The release of this month’s consumer price index data early next month should shed final light on the matter, KPMG Taiwan said.
Rising inflation also means the government has to allow more leeway for standard tax deductions, salary tax deductions and special deductions for people with disabilities, the firm said.
The last time the government revised deductions was in 2018 and the consumer price index has since grown 3.2 percent to 100.49, it said, suggesting that standard tax deductions should climb by NT$4,000 to NT$124,000, while salary tax deductions and special tax deductions for people with disabilities should be NT$206,000, an addition of NT$6,000.
The new formula would push up taxable income thresholds for different brackets, KPMG Taiwan said.
Furthermore, the government has to make greater concessions on inheritance and gift taxes, as the consumer price index has risen 10.9 percent since the last adjustment in 2009 at 93.49, the company said.
That means the inheritance tax allowance should rise from NT$12 million to NT$13.32 million, while gift tax deduction should grow from NT$2.2 million to NT$2.44 million a year to reflect inflation, it said.
The ministry said it has to wait for this month’s consumer price index data to confirm the need for adjustments and would disclose related figures in December at the latest.
ANTI-COERCION: EU Commissioner for Competition Margrethe Vestager said the EU wishes to bolster relations with Taiwan within the framework of its ‘one China’ policy The EU is to further its engagement with Taiwan to defend democracy, freedom and an open market, while bolstering cooperation in semiconductor supply chains, EU Commissioner for Competition Margrethe Vestager said on Tuesday. In her remarks at a European Parliament plenary session focused on Taiwan-EU relations, Vestager referred to China’s increasing military presence in the Taiwan Strait, including flying missions off the southwest coast of Taiwan. “This display of force may have a direct impact on European security and prosperity,” she said, adding that the EU encourages all parties to avoid any unilateral actions that might increase tensions across the Strait. “We Europeans
DOWN, NOT OUT: The election was not a total defeat, as Chen still received 73,433 votes against the recall, and his party has ‘grown up’ through the process, he said Voters in Taichung yesterday recalled Taiwan Statebuilding Party Legislator Chen Po-wei (陳柏惟), making him the first legislator in the nation’s history to lose a recall election. A total of 77,899 votes were cast to recall Chen, while 73,433 voted against, the Taichung City Election Commission said, adding that 51.72 percent of the city’s second electoral district turned out. The Central Election Commission is to confirm the final figures within the next seven days, it said. Commission data showed that there are 294,976 eligible voters in the second district, comprised of Dadu (大肚), Shalu (沙鹿), Longjing (龍井), Wufong (霧峰) and Wurih (烏日) districts. Chen won
MILITARY RESOLVE: Washington does not want a cold war with Beijing, it just wants ‘China to understand that we’re not going to step back,’ Biden told a CNN town hall The US would come to Taiwan’s defense and has a commitment to defend the nation China claims as its own, US President Joe Biden said on Thursday, although the White House later said there was no change in policy toward Taiwan. “Yes, we have a commitment to do that,” Biden said at a CNN town hall meeting when asked if the US would come to the defense of Taiwan, which has been facing mounting military and political pressure from Beijing to accept Chinese sovereignty. While Washington is required by law to provide Taiwan with the means to defend itself, it has long
AFTERSHOCKS LIKELY: A hiker was hurt by falling rocks at the Taroko National Park, while a tower crane was damaged at a construction site in New Taipei City A series of earthquakes yesterday injured several people, damaged buildings and disrupted transportation. A magnitude 4.5 earthquake struck 8km northeast of Hualien County Hall at 12:38pm at a depth of 23.8km, the Central Weather Bureau’s Web site showed. It was followed at 1:11pm by a magnitude 6.5 quake centered near Yilan County’s Nanao Township (南澳) at a depth of 66.8km. A magnitude 5.4 earthquake followed less than a minute later, with its epicenter near the county’s Datong Township (大同), at a depth of 67.3km. A magnitude 4.2 quake again struck Nanao at 2:05pm at a depth of 63km. The magnitude 6.5 earthquake was the strongest