COST OF LIVING/In policy reversal, Tsai pledges cash rebate of surplus tax revenues

01/03/2023 05:10 PM
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President Tsai Ing-wen. CNA file photo
President Tsai Ing-wen. CNA file photo

Taipei, Jan. 3 (CNA) President Tsai Ing-wen (蔡英文) on Tuesday promised to give back what it has described as surplus tax revenues to Taiwanese in the form of cash, a clear departure from her previous comments in which any such plans were ruled out.

Tsai said via social media Tuesday that the government would plan for the return of those surplus tax revenues to people in the form of cash.

The government would "reserve a certain amount" of the NT$180 billion (US$5.86 billion) in surplus tax revenues that were originally to be held on to and share it with the people through lump-sum cash payments, Tsai said.

Tsai said it was a decision made after discussions over the past few days, without elaborating, but local media said it came amid pressure from lawmakers from her Democratic Progressive Party (DPP) and the opposition Kuomintang (KMT) to go through with a cash rebate plan.

The controversy emerged after the Ministry of Finance estimated that last year's tax revenues could exceed the budgeted amount by NT$450 billion (US$14.6 billion), after the central government collected more than NT$3 trillion in tax revenues in the first 11 months of 2022.

The existence of that surplus led to calls by legislators across party lines to directly return the money to the people in various forms.

After a meeting Saturday between Tsai and top Cabinet officials, however, the government said it would allocate most of those revenues to other uses, leaving a reserve of NT$180 billion that could be shared with the people.

Tsai told reporters the next day that Saturday's meeting did not touch on whether the government would give some of the tax revenues back to people in either cash or vouchers of the same value.

The government has not set a timeline for any such plans, Tsai said at the time, adding that it would instead strive to make sure that "every penny is put to good use."

In reversing her reluctance to support the idea Tuesday, Tsai said the government would propose a plan at an appropriate time and send it to the Legislature for approval.

Earlier the same day, Premier Su Tseng-chang (蘇貞昌) told reporters in Taipei that any government plan to return tax revenues to the people through cash payments would require a legal basis and backing by the Legislature.

KMT lawmakers call for extra legislative session to address the use of the surplus tax revenue in Taipei on Tuesday. CNA photo Jan. 3, 2023
KMT lawmakers call for extra legislative session to address the use of the surplus tax revenue in Taipei on Tuesday. CNA photo Jan. 3, 2023

It was not like "giving out red envelopes" randomly, Su said, referring to a common practice in Chinese-speaking communities of giving out red envelopes containing money at weddings or during the Lunar New Year holidays.

The premier did not specify how much of the NT$180 billion would be kept as a reserve, saying only that the government would need "spare" funding to tackle the challenges posed by China's surging COVID-19 cases and the protracted war in Ukraine.

KMT legislative caucus whip Tseng Ming-chung (曾銘宗), meanwhile, said at a press conference Tuesday that it would be "best" for the government to issue the cash payment before the Lunar New Year holiday, which begins on Jan. 20 and lasts until Jan. 29.

To achieve that goal, the Legislature should hold a provisional session after the regular one ends on Jan. 13 to discuss the matter, Tseng Ming-chung said.

The regular session, which should have ended at the end of December, has been extended to Jan. 13 to give lawmakers more time to review the proposed NT$2.71 trillion general budget plan for fiscal 2023 proposed by the Cabinet at the end of August.

In response, Legislator Kuo Kuo-wen (郭國文) of the DPP, which holds a majority in the Legislature, said that even if lawmakers approved a bill at the provisional session to give back tax revenues, it would be unlikely that any payments could be made ahead of the holiday.

The government should be given more time to make plans, but it should also "respond to the needs of people as soon as possible," Kuo said, without elaborating.

According to the Presidential Office, the central government has around NT$380 billion of the NT$450 billion in surplus tax revenues at its disposal, because it will have to distribute NT$70 billion of the total to local governments.

A total of NT$100 billion will be used to provide financial support to the health and labor insurance systems as well as subsidize electricity prices, which have come under pressure because of the high costs of natural gas and other energy sources, the office said.

Another NT$100 billion will be used to fund plans to boost the resilience of the country's economy in response to global inflation and other economic challenges, the office said.

(By Lai Yu-chen, Fan Cheng-hsiang, Wang Yang-yu and Teng Pei-ju)

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