Taipei, A leading think tank in Taiwan suggested Wednesday that the government's higher than expected tax revenue should be used to help small businesses and people in need.
The tax revenue should also be directed to the development of central and southern Taiwan to narrow the gap with the northern areas, said Wang Jiann-chyuan acting president of Chung-Hua Institution for Economic Research (CIER).
Small and medium sized enterprises, low-income households and young people would benefit from such assistance, he said in response to President Tsai Ing-wen 's New Year's Day address Tuesday, in which she said the government's higher than projected tax revenue will go toward to the needy so that the people could benefit from the country's economic growth.
In the speech, Tsai said that with the growth of the domestic economy over the past two years, national tax revenues have exceeded expectations and she has asked the Cabinet to devise a comprehensive program that will give priority to low-income citizens so they can enjoy the benefits of the economic growth.
"One focal point of government policy efforts in 2019 is to make an all-out effort to enhance people's livelihoods and take better care of young people and the disadvantaged," Tsai said in the address.
According to local media reports on Wednesday, the national tax revenue was about NT$50 billion (US$1.62 billion) over the projected amount in 2017 and NT$55 billion-NT$60 billion higher than expected in 2018.
Cabinet spokeswoman Kolas Yotaka told the press that a plan to pass on the higher than expected tax revenue to the public is still being finalized.
Meanwhile, former Premier Sean Chen praised Tsai's idea of passing on the benefits to the public but said it was not the right time to make such a move.
Chen, a former deputy finance minister and former chairman of the Financial Supervisory Commission, said the government debt as of the end of November 2018 was NT$5.3 billion (US$172 billion) and priority should be given to reducing it.
A better than expected national tax income does not necessarily mean a fiscal surplus, he said.
If the government if going to pass on the tax earnings to low income people, it has to clearly define the term "low income," Chen said.
Meanwhile, Huang Yao-hui a professor at the Department of Public Finance and Tax Administration at National Taipei University of Business, said there are many loopholes in the current system for filing income tax returns.
Many people earn a lot of money from the underground economy and they do not have to pay income tax on those earnings, so it will be unfair for the government to return the benefits of strong revenues to such people, Huang said.
Source: Focus Taiwan News Channel
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