Tax Revenue Declines by 5.3% to NT$808bn
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Loading... - Aoi Shimizu
- 15 Jul 2024
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In a notable downturn, Taiwan's tax revenue last month decreased by 5.3 percent compared to the previous year, amounting to NT$808.3 billion (US$24.9 billion). This marks the second consecutive month of declining revenue, primarily driven by a significant drop in corporate income tax, as reported by the Ministry of Finance.
Key Factors Contributing to Revenue Changes
Corporate Income Tax: Revenue from corporate income tax fell sharply by 19.4 percent, totaling NT$357 billion. This NT$86.2 billion decrease is largely attributed to the global economic slowdown affecting non-tech sectors, as explained by ministry statistician Liu Shun-rong.
Personal Income and Securities Transaction Taxes: Despite the fall in corporate income tax, revenue from personal income and securities transaction taxes saw gains. Personal income tax revenue increased by NT$28.4 billion to NT$344.4 billion, while securities transaction tax revenue rose by NT$7.9 billion to NT$27.6 billion. The increase in personal income tax is linked to higher interest income, earnings, and property transfer gains.
Securities Transaction Tax: The 8.8 percent rally in the TAIEX, along with a 40.2 percent increase in daily turnover to NT$561.5 billion, contributed to the rise in securities transaction tax revenue. This uptick was significantly influenced by Nvidia Corp CEO Jensen Huang's participation in Computex Taipei and subsequent price hikes by Taiwan Semiconductor Manufacturing Co.
Land Value Increment Tax: Revenue from the land value increment tax grew by 5.8 percent to NT$7 billion, benefiting from government subsidies for first-home purchases and the wealth effect from TAIEX rallies.
Cumulative Tax Revenue Performance
For the first six months of the year, cumulative tax revenues increased by 2 percent to NT$2.1 trillion compared to the same period last year. This cumulative performance remains 11.1 percent ahead of the ministry's budget projections.
Despite the current decline in corporate tax revenues, the overall fiscal health shows resilience due to diversified revenue streams, particularly from personal income and securities transactions.
