Green taxes to be levied gradually

The committee made the decision following three hours of discussion on the prospective energy and environmental tax at a meeting held yesterday, but committee members failed to reach a consensus on the imposition of the controversial environmental taxes, such as taxes on water pollution and waste, Chang said.

Chang said that the related tax bills are expected to be ratified by the Legislative Yuan in 2010, and put into practice in 2011 at the earliest.

There will be three major benefits from the imposition of green taxes, including reducing energy consumption, upgrading environmental protection and promoting economic development, Chang continued.

Although the Ministry of Economic Affairs and local industrial and commercial associations support the imposition of green taxes, they shared the view that the greenhouse gas tax of NT$750 per metric ton, as proposed by the Chung-Hua Institution for Economic Research and adopted by the Tax Reform Committee, is too high to be affordable by local people, which has been sharply cut from the original NT$2,000 per metric ton.

Accordingly, members of the Tax Reform Committee yesterday failed to reach a consensus on the tax rate for greenhouse gas, and may further cut the tax to minimize the impact of the tax on local industries, Chang continued.

Chang estimated that based on the committee's current version of the green tax imposition, the annual energy tax revenue will reach NT$164.7 billion during the 10th imposition year, and the greenhouse gas tax income will hit NT$239 billion during the 10th year, adding up to NT$403.7 billion per year.

The government will use the green tax revenue to subsidize the public transportation systems and low-income households, and cover the tax revenue loss resulting from the cancellation of commodity tax, stamp tax and entertainment tax, as well as from the reduction of personal consolidated income tax rate and the business income tax.

Meanwhile, Chang said that the energy tax will be imposed on gasoline, diesel, kerosene, aviation fuel, liquefied natural gas, fuel oil and natural gas once an energy tax law has been passed by the legislature, he added.

He stressed that the domestic oil price won't exceed NT$50 per liter during the 10th year of the imposition of energy tax on gasoline and diesel oil products, with the maximum price likely to reach around NT$46 per liter, a level recorded by Korea and Japan in 2008.

Also yesterday, Vice Premier Eric Chu said at the committee meeting that the imposition of an energy tax and environmental tax requires the support from parliament and the public, and in order to mitigate the burden on local enterprises and people, the government will take a gradual approach and will not collect high tax rates in this regard in the short-term.

The originally proposed tax of NT$2,000 per metric ton on greenhouse gas was really too high to be accepted by local enterprises and people, Chu continued.

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