Morris Chang, others voice support for wealth tax
By John Liu ,The China Post
May 3, 2014, 12:02 am TWN
In response to a newly passed wealth tax, business tycoons including Morris Chang (張忠謀) on Friday collectively expressed their willingness to pay for a higher income tax out of their own pockets.
The United Evening News yesterday reported that Taiwan Semiconductor Manufacturing Company (TSMC, 台積電) Chief Executive Officer Morris Chang, Hon Hai Precision Industry Chairman Terry Gou (郭台銘), Eastern Realty (東森房屋) Chairman Wang Ying-chieh (王應傑) and Delta Electronics (台達電) founder and Honorary Chairman Bruce Cheng (鄭崇華) have endorsed the tax reform and expressed their willingness to pay extra.
They said that their tax payments were relatively low and that their donations were actually higher than their tax payments, according to the evening paper.
Finance Minister Expresses Gratitude
Finance Minister Chang Sheng-ford (張盛和) expressed his appreciation of the tycoons' cooperation while visiting the National Taxation Bureau.
The minister pointed out that about 9,500 households — a mere 0.15 percent of the nation's six million — will pay higher taxes as a result of the new legislation.
Average income earners as well as the physically and mentally disabled will pay lesser in taxes. The new legislation is likely to reduce income disparity in Taiwan, Chang said.
The minister added that the rich can consider the higher tax as a form of charity.
The Legislature approved a new package rolled out by the Ministry of Finance to beef up the nation's financial system on May 1.
Call for Honesty in Tax Declaration
It is possible that the rich will figure out methods for tax evasion as they always do, Chang said.
However, it is the National Taxation Bureau's responsibility to enforce the law and punish those who evade their taxes accordingly, Chang added.
Chang called on the public to file their tax returns with honesty.
In addition, calling upon the very wealthy, the minister said, “Consider (paying higher taxes) as a charitable act. The payment will benefit the entire nation.”
The minister added that the very rich have so much money that they never spend it all.
The tax reform bill passed on Thursday is “very meaningful,” as it will redistribute some wealth from the rich to the middle and low income earners, reducing income disparity between the rich and the poor, and any social grievances the wealth gap might have caused, Chang said.
Wealth Income Tax Raised to 45%
Among the new taxation measures passed recently, business tax levied on financial institutions was raised from 2 percent to 5 percent; income tax for those earning NT$10 million or more was raised to 45 percent; deductible amounts were raised for average and disadvantaged income earners.
The bill also stipulates that the existing rules for putting tax revenue collected from the financial sector into a financial institution bail-out fund will expire 10 years from the law's passing. In addition, it was agreed that insurers will only see sales taxed after retention expenses are excluded.