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Premier: new fiscal plan has nothing to do with election
Taiwan News, Staff Writer
2014-02-25 12:43 PM
The government has introduced a new fiscal plan Monday designed to create more revenues by raising the tax on the richest and on banking/ insurance sectors as well as to cut or adjust public expenditure. A cabinet-level panel led by Vice Premier Mao Chi-kuo will kick off to hold the purse strings. Premier Jiang Yi-huah said on Tuesday that more details will be left for discussions and stressed that the move has nothing to do with the seven-in-one elections to be held in late 2014.

Jiang has mentioned earlier last week over the principles of fiscal plan to restore the island's financial health and to reach tax fairness. Finance Minister Chang Sheng-ford held a press conference Monday with detailed elaborations over this new-born proposal regarding tax as well as budget reform. Tax reform came under the spotlight as the banking and insurance institutions are going to be levied with a five percent business tax from the current two percent. Also, the plan is set to create a new bracket for the wealthiest whose annual net income exceeds NT$10,000,000 (US$330,000). People in this bracket will be subject to the 45 percent of tax rate from 40 percent. An estimated 9,500 people are expected to be affected.

Jiang said in a media interview Tuesday that the fiscal plan will be aimed at four aspects, including managing national debt, reframing spending, finding funding, and adjusting tax policy. He added that the tax hike in this plan will target at the financial businesses with strong earnings to "bring the tax rate back to five percent that the government used to levy before the Asian financial crisis" and to "leave the weak financial businesses untouched, such as the securities and investment trust firms."

Asked by media whether the plan of raising the tax credit for the salary earners is to favor the majority voters for winning the elections, Jiang rigorously denied the claim, saying that the plan serves purposes to tackle the rising public debt and potential economic crisis. Shares in Taiwan gained nearly 0.2 percent in early trading Tuesday with the loss of financial stocks narrowing down after a sharp drop on Monday.

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