Taipei, Oct. 4, 2012 (CENS)--Since the accumulated price hike in recent years may exceed 3%, the Ministry of Finance (MOF) estimated that tax exemption amount, taxation brackets, and tax exemption amount for retirement income may be raised by at least NT$2,000 next year, creating NT$6.8 billion of tax-reduction benefit for 5.4 million households.
Tax exemption amount, special salary deduction amount, standard deduction amount, deduction amount for the handicapped, and tax exemption amount for retirement income have remained unchanged since 2010. The MOF pointed out that up to August this year, accumulated price hike in recent years had reached 3.17%, greatly boosting the possibility for reduction for composite income tax in 2013.
In addition, taxation brackets, which have remained unchanged for two years, will also be raised. The threshold of net income for the lowest 5% tax rate will be raised to NT$520,000, up from NT$500,000 now. In other words, the tax rate for the net family income ranging NT$500,000 to NT$520,000 will plunge to 5%, down from 12% now. The five-tier tax rates for personal income are 5%, 12%, 20%, 30%, and 40%.
Chang Sheng-ford, minister of finance, noted that the adjustment of various tax exemption amounts, deduction amount, and taxation brackets is linked to price index and the tax reduction mechanism will be triggered automatically, once the accumulated hike of the price index reaches 3%. The MOF is monitoring closely change in prices and will determine the adjustment scale according to price statistics in the next two months. Initial calculation shows the tax-reduction benefit will amount to NT$6.8 billion.
The MOF calculated that based on 3.17% price hike, the tax exemption amount, salary deduction amount, standard deduction amount, and deduction amount for the handicapped will increase by NT$2,000 at minimum and NT$4,500 at maximum. Personal tax exemption amount will increase by NT$3,000, from NT$82,000 per person to NT$85,000. Salary deduction mount and the deduction amount for the handicapped will rise from NT$104,000 to NT$107,000 and standard deduction amount will increase to NT$78,000 for singles and NT$156,000 for couples.
