COST OF LIVING/Disposable income hike expected to reduce income tax next year
Taipei, Aug. 12 (CNA) The median value of Taiwan's disposable income per capita in 2021 was NT$326,000 (US$10,870) -- an increase of NT$6,000 from 2020 -- which is expected to raise the amount of tax deductions for people who pay income tax next year, the Directorate-General of Budget, Accounting and Statistics (DGBAS) announced Friday.
The expense for maintaining basic living, as defined by the Taxpayer Rights Protection Act, is set as 60 percent of the median value of disposable income per capita and is expected to rise in tandem with disposable income per capita to reach NT$196,000 this year, compared to NT$192,000 in 2021.
According to an equation used by the Ministry of Finance (MOF) for levying the income tax, the difference between the expense of maintaining basic living and the total amount of tax deductions allowed by Taiwan's law is also tax-deductible, which means that with the increase in the expense for maintaining basic living, the difference is also set to become greater, allowing people to pay less income tax.
For instance, a household of four whose annual income ranges from NT$540,000 to NT$1.21 million will be able to save up to NT$1,920 in income tax next year according to the equation, while single taxpayers who earn less than NT$540,000 a year will be able to save NT$200.
The tax-deductible portion of the expense for maintaining basic living will be increased to reflect increases in the median value of disposable income per capita, the MOF said, adding that the new expense for maintaining basic living will be announced later this year.
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