The annual tax-deductible allowance for basic living expenses is to be raised to NT$196,000 (US$6,335) per person, with around 2.3 million households expected to benefit from the upward adjustment when they file their income taxes in May next year.
Premier Su Tseng-chang (???) announced the NT$4,000 increase at a Cabinet meeting Thursday as a tax cut measure applicable during the 2023 tax season, according to Executive Yuan spokesman Lo Ping-cheng (???).
It is the sixth consecutive year that the annual tax-deductible allowance for basic living expenses has been raised, Lo added.
For a family of four, for example, the NT$16,000 cushion provided by the higher allowance will provide income tax savings of NT$1,920 at a 12 percent tax rate.
According to Taiwan’s Taxpayers’ Rights Protection Act passed in 2017, the government should not tax the amount individuals need to afford basic necessities (also known as the basic living cost), which is set at 60 percent of the median per capita disposable income value from the preceding year.
According to a survey of family income released by the Directorate-General of Budget, Accounting and Statistics on Aug. 12, the median disposable income per capita in 2021 stood at NT$326,000 — an increase of NT$6,000 from 2020.
Also during the Cabinet meeting Thursday, Su announced that he had approved a Ministry of Labor (MOL) proposal to raise the minimum wage from NT$25,250 a month to NT$26,400 for salaried workers, and from NT$168 up to NT$176 for hourly workers, effective Jan. 1, 2023.
Source: Focus Taiwan News Channel