Gov’t to minimize tax reform impact on enterprises and individuals: minister

The China Post news staff & CNA

The China Post news staff & CNA– Finance Minister Christina Liu (劉億如) said that the government has no set stance on whether to implement luxury tax geographically, yesterday, and offered that the new Cabinet’s tax reform policy will be implemented step by step to minimize its impact on enterprises and individuals.

It was at Taipei’s CommonWealth Economic Forum (天下經濟論壇) that Liu made her remarks. Along with professionals from mainland China and South Korea, the finance minister participated in a panel discussion titled “Keys to East Asian Economies.” The government had not discussed if taxing according to geographic locations — since housing expenses are not universal across regions — were an option, the finance minister said. If such topic is of public concern, then the government could open public forums for discussion, she offered.

Regarding tax reforms, Liu cited President Ma Ying-jeou as saying the main purpose of reforming the nation’s tax system is to achieve fairness and justice through measures that will require “all those who are able” to contribute more to national coffers.

However, she suggested that these measures would only be taken “step by step,” as any and every change would greatly impact society.

“We should think about how to design (the reform package) in detail so that we can achieve our purpose while minimizing its impact on companies and individuals,” Liu said.

No individual political parties or those benefiting from current policies will fight against the society’s consensus, and adjustments in the taxing system toward social justice is what the public calls for right now. “It is a world trend,” Liu claimed.

Also, “It’s all about timing.” Policies are only right when implemented at the right time, she asserted.

Wu Ho-mou (烏和懋), executive vice dean of the National School of Development at Peking University (北京大學國發研究院), added that governments should not only address tax reforms but also work to improve their economic power.

Wu said a country’s economic power could be assessed by how many global top 200 companies it produces.

Taiwan has only one company on the list — Hon Hai Precision Industry Co. — as opposed to Japan’s 24, China’s 19, and South Korea’s five companies. This indicates that the Taiwan government still has room for improvement, he said.

Hyun Oh-seok, president of the Korea Development Institute, suggested that governments should expand the base of people who need to pay taxes instead of raising the tax rate, which could also help the government achieve its target of increasing total tax revenues.