Taiwan's Finance Ministry to Impose Energy Taxes

Taipei, Aug. 4, 2011 (CENS)--To reinforce Taiwan government's financial health, the Ministry of Finance has planned to impose energy taxes in its next stage of tax reforms, confirmed the Finance Minister Lee Sush-der.

Lee noted that imposing energy taxes will not only help Taiwan to step up carbon reduction and enhance energy efficiency, but will also improve worsening income inequality in the society following the government's income-tax reductions in the past three years.

Lee pointed out that although having yet to be officially launched, energy taxes, in fact, have been imposed via 13 kinds of taxes, such as commodity taxes and motor vehicle fuel taxes, in Taiwan for years, which generate a total of NT$180 billion worth of revenue for the national coffers a year.

Although the launch of energy tax will inevitably draw criticisms from the public, Lee said, the MOF is resolved to draft necessary rules as soon as possible to speed up the island's tax reforms.

In addition to imposing energy taxes, the MOF will also try to improve Taiwan's current property tax base, which has been too low compared to those in most of developed countries, by imposing heavier taxes mainly on luxury houses and multiple property owners as part of its tax-policy reform aimed to push up the tax burden on residents to the level of 14.3% seen in 2008. Taiwan's tax burden was only 11.9% in 2010.

Hopefully, imposing energy taxes and improving the property tax base will help the government rake in an additional tax revenue of NT$300 billion a year in the future, which MOF officials say will be used to reduce the disparity between the rich and the poor in Taiwan.