Gov`t Doesn`t Rule Out Levying ‘Rich Man’ Tax

To narrow the widening wealth gap, the government doesn’t rule out the possibility of levying capital gains tax and luxury tax, so long as it has the backing of the legislature, wins the support of social consensus, and doesn`t violate the principle of golden mean, said Premier Wu Den-yih yesterday (Sept. 9).

At a press conference on the anniversary of his office, Wu pointed out that the Ministry of Finance (MOF) is reviewing the tax levy according to the conclusions of the now defunct tax reform committee of the Executive Yuan (the Cabinet).

In order to avoid impacting the stock market, the tax committee fell short of proposing immediate levy of capital gains tax, listing it only as a medium- to long-term option for free choice by corporate bodies initially. Those who choose to be subject to the tax can deduct their loss from their taxable income.

Meanwhile, scholars have proposed levying 10% extra tax on people for the purchase of such luxury products as luxury houses, private planes, private yachts, premier cars, expensive fashion products, and expensive banquets.

Wu also reported that he has asked the MOF to intensify effort in cracking down on tax evasions, especially those large-scale ones, also for the purpose of narrowing wealth gap, which he listed as one of the major five challenges confronting the Cabinet. The other four are lowering unemployment rate, boosting economic growth, vitalizing the economy, and enhancing government performance.

In response to the widespread concern over the Kuokuang petrochemical project, the island’s eighth naphtha cracking complex, Wu said its fate will hinge on the need of the nation, the need of the industrial chain, satisfaction of the environmental requirement, and acceptance of neighboring residents.

He noted that when the project was approved by the government in 2005, Singapore also started to build a new naphtha cracking complex in cooperation with Shell, which already inaugurated its operation in January this year, in sharp contrast to the continuing entanglement of the local project in environmental dispute.

In consideration of the nation`s capacity for enduring the environmental effect of heavy industries, Wu pledged that Kuokuang will be the nation`s last major petrochemical project, even if it is built successfully.
(by Philip Liu)

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