Reduction of estate, gift taxes debated

At the hearing, officials of the Tax Reform Committee under the Executive Yuan unveiled its reduction plan, which seeks to cut the current maximum rate of 50 percent for both taxes to 40 percent.

Specifically, the plan divides the estate tax into five brackets: 40 percent for over NT$100 million, 30 percent for NT$70 to NT$100 million, 21 percent for NT$40 to NT$70 million, 13 percent for NT$10 to NT$40 million, and 6 percent for under NT$10 million.

The plan also divides the gift tax into five brackets: 40 percent for over NT$45 million, 30 percent for NT$30 to NT$45 million, 21 percent for NT$15 to NT$30 million, 13 percent for NT$5 to 15 million, and 6 percent for under NT$5 millon.

Wang Tu-fa, lawmaker of the Democratic Progressive Party (DPP), said cutting the maximum rate by 10 percent does not provide enough incentives for Taiwanese to bring back their overseas assets to the island.

“The imposition of gift and estate taxes is basically double taxation, as people already have to pay income taxes,” Wang said. “Instead of lowering the maximum rate by 10 percent, the government should think more about simplifying tax rates.” Wang’s remarks won the approval of Hsueh Ling, president of the Taiwan Academy of Banking and Finance. He said Taipei City is one of the richest cities in Taiwan, yet revenue in estate and gift taxes from Taipei residents is low compared to that in other parts of the island.

“What I propose is to reduce the tax brackets to four,” he said.

DPP lawmaker Hou Shui-sheng proposed that the tax be scrapped altogether.

Huang Yao-hui, associate professor with the tax administration department of the National Taipei College of Business, took a supportive stand for the 10 percent reduction plan.

“Most developed nations have an estate and gift tax system. Few of them abolish this system,” Huang said.

He suggested that the government reward those who pay their gift and estate taxes honestly, so as to create a win-win situation for both the people and government.

Tseng Chu-wei, professor with National Chengchi University’s finance department, said he supports the reform committee’s tax reduction plan, yet this should be done in a step-by-step approach and not be done hastily.

Representatives from the Chinese National Federation of Industries said there should be an exemption of estate and gift taxes of NT$10 million to NT$30 million, adding that a waiver of estate tax between husbands and wives should be implemented.

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