Taipei-The Cabinet on Thursday adopted a motion to annul the Stamp Tax Act, a move toward scrapping the decades-old tax that is a main source of revenue for local governments.
The motion will be forwarded to the Legislature for further review.
Stressing the move to scrap the stamp tax was long overdue, Premier Su Tseng-chang (???) said abolition would not only benefit enterprises, but also the general public as uniform invoice or lottery tickets are subject to the levy.
In response to the objection of some local governments that abolition will put a dent in their tax revenue, Finance Minister Su Jain-rong (???) said Thursday at a press conference the central government would make up for tax revenue losses caused by the abolition.
The fiscal autonomy of local governments will remain intact with the central government allocating funds to make up for the loss, Su said.
Echoing the Finance minister, Taxation Administration Director-General Lee Ching-hua (???) said the levy is out-of-date and could overlap with the value-added business tax.
Meanwhile, Taipei Mayor Ko Wen-je (???), told gathered media before addressing the City Council Thursday that the central government first needs to explain how it plans to make up for the annual loss of NT$4.9 billion (US$158.3 million) in tax revenue.
When asked during a question-and-answer session at a City Council how the city government will respond to the loss of tax income, Ko said this is a problem the central government must address.
The Stamp Tax Act was promulgated on Dec. 8, 1934, making it one of the oldest taxes in the nation.
After dozens of legal amendments, the tax currently applies to certain monetary payments; contracts to perform specific jobs or tasks; contracts for the sale of personal property; and contracts for the sale, transfer and subdivision of real estate.
According to the Ministry of Finance, the revenue generated from stamp tax totaled NT$12.2 billion last year, NT$11.1 billion in 2017 and NT$10.6 billion in 2016.