Tax revenue misses 2025 target due to U.S. tariffs, credit controls: MOF

Taipei, Jan. 13 (CNA) Taiwan's government missed its budget target for last year by NT$50.5 billion (US$1.598 billion), as U.S. tariffs and local credit controls damped the housing and automotive markets, leading to lower revenue collection mainly of business, commodity, and property taxes, the Ministry of Finance (MOF) said Tuesday.

Taiwan's net tax revenue last year fell 0.3 percent year-on-year to NT$3.75 trillion, missing the budget target by NT$50.5 billion, the MOF said in a press release.

The three tax categories with the most significant deficits were business tax, land value increment tax, and commodity tax, which fell by NT$26.7 billion, NT$20.9 billion and NT$18.8 billion, respectively, according to the ministry.

Liu Hsun-jung (劉訓蓉), deputy director of the MOF's Department of Statistics, attributed the revenue shortfall to tariffs implemented by the Trump administration since August and government credit control measures designed to slow down real estate transactions in Taiwan.

Uncertainty surrounding U.S. tariffs and trade negotiations led Taiwanese consumers to delay vehicle purchases in anticipation of lower duties, causing a sharp drop in sales and a significant reduction in commodity and business tax revenues.

Meanwhile, due to the central bank's credit control measures, property trading was very slow last year, leading to a decrease in all property-related taxes collected, the MOF said.

For example, individual house and land tax revenue fell by 26.8 percent to NT$52.4 billion, the first time the tax has dropped since it was introduced in 2016.

The MOF noted that last year marked the government's first "revenue shortfall" in five years.

Despite the downturn, nine categories of tax revenue hit record highs last year, including corporate income tax, individual income tax, estate tax, securities transaction tax, house tax, vehicle license tax, stamp tax, amusement tax, as well as income tax on combined real estate and land sales for enterprises, according to the ministry.