Legislative committee mulls distributing surplus tax revenue to public

Taipei, March 24 (CNA) The Legislative Yuan's Finance Committee on Monday held a preliminary hearing on Kuomintang (KMT) proposals for surplus annual tax revenues over a certain amount to be distributed to the public in cash.

Lawmakers from the KMT, which along with the smaller Taiwan People's Party (TPP) controls the Legislature, submitted twin proposals to amend the Surplus Act mandating cash handouts to the public if actual tax revenues exceed budget estimates by 120 percent or NT$300 billion (US$9.08 billion).

In fiscal year 2024, tax collection reached a total of NT$3.7619 trillion, a record high that surpassed expected tax revenue in the 2024 annual budget by NT$528.3 billion.

The KMT has previously proposed handouts of NT$10,000 to each individual, which would cost a total of NT$230 billion.

The Democratic Progressive Party (DPP)-led government, meanwhile, has variously proposed using the extra funds to pay down the national debt, reserving them for future use, or using them to boost the national defense budget.

At the hearing Monday, KMT lawmaker Lo Ming-tsai (羅明才) said the public should share in the benefits of Taiwan's economic success. He noted that cash handout programs have been implemented not only in Taiwan, but also Japan, Singapore, Hong Kong, Macau and the United States.

DPP Legislator Wu Ping-jui (吳秉叡) said the Legislative Yuan only has the power to review, not propose budgetary bills.

The KMT's proposals attempt to use a legislative amendment as "packaging" to conceal what is in fact a budgetary proposal, Wu said, adding that this may be unconstitutional.

Juan Ching-hua (阮清華), a political deputy minister at the Ministry of Finance, warned the committee that higher-than-expected tax revenues did not necessarily mean that the country's finances are in order.

From 2012 to 2023, Taiwan had a budget surplus only three times, while running a budget deficit "in almost every other year," Juan said.

Based on the current KMT proposals, there could be a situation in which tax revenues exceed expectations but still fall short of expenditure, in which case the government could be legally bound to borrow money to distribute as cash handouts, Juan said.

Following the debate, the committee advanced the proposals for a reading in the full Legislature on Friday.

At that time, cross-party negotiations will be held with the TPP regarding its proposed amendments to law, said committee chair Lai Shyh-bao (賴士葆) of the KMT.