HONG KONG MODEL: Chu Ping-yu
said officials should learn from Hong Kong, which canceled
the taxes and posted a 20 percent rise in revenue
STAFF WRITER
Tuesday, Jun 19, 2007, Page 12
The government should reduce or even cancel inheritance and
gift taxes to stem capital outflow and narrow the gap between
rich and poor, said Chu Ping-yu ($B), chairman of Taiwan
Life Insurance Co ($BBf_T?MTh(J).
Capital outflow to date this year is estimated at US$300
billion to US$500 billion, as businesses and individuals search
for better investment returns and look to avoid heavy taxes,
Chu said.
Revenue Rise
If the government axed the inheritance and gift taxes altogether,
tax revenues could jump by NT$200 billion (US$6 billion) a
year, compared with annual revenues of NT$23 billion from
inheritance taxes, Chu was quoted as saying by the Chinese-language
Liberty Times (the Taipei Times' sister newspaper) yesterday.
He made the remarks on the sidelines of an insurers' summit
in Kunming, China.
Chu added that even if the taxes were cut by 10 percent from
the current 50 percent, the maximum rate, some of the capital
would naturally return to Taiwan.
Hong Kong's experience serves as a good model, he said.
Effective
The Hong Kong government revoked the inheritance tax last
year, and its tax revenues rose by about 20 percent, proving
the effectiveness of the policy, Chu said.
The Ministry of Finance favors retaining the inheritance
and gift taxes as Taiwan does not levy taxes on capital gains.
Minister of Finance Ho Chih-chin ($B2?;V6V(J) has said that
the inheritance and gift taxes can be lowered to encourage
capital returns, but must not be abolished.
Chu also gave a rosy outlook for the nation's first local
insurer, thanks to the strong performance of the local bourse
this year.
The insurer reported net profits of NT$1.67 billion for the
first five months of the year, already surpassing its full-year
net income last year. Earnings per share for the first half
of the year are expected to exceed NT$4, he said.
http://www.taipeitimes.com/News/biz/archives/2007/06/19/2003365974
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