Prospective tax on greenhouse gases will be lowered.
Taipei, Oct. 15, 2009 (CENS)--To alleviate the impact on local industries, the greenhouse-gas tax under the prospective energy and environmental tax will be cut to NT$700-800 per metric ton, from the original proposal of NT$2,000, a revision which will halve the projected income from the energy and environmental tax to NT$400 billion in the 10th year, according to the latest tax reform draft just completed by the tax reform committee, under the Executive Yuan.
The tax reform committee is scheduled to convene a meeting next Monday (Oct. 19) to discuss the latest draft. The reduced amount is based on the levy of the tax in France and Ireland.
The Ministry of Finance (MOF), however, still deems the reduced tax too high, saying the ideal amount is NT$500 per metric ton, according to which the energy and environmental tax income will reach NT$360 billion in the 10th year, four to five times the existing commodity-tax income for gasoline and LNG (liquefied natural gas).
The tax reduction will greatly alleviate the burden on heavy energy users, such as companies inside science-based industrial parks, Formosa Petrochemical, CPC Taiwan, China Steel, and Taipower, thereby lessening the resistance to its implementation.
Except tax on greenhouse gases, energy tax will remain at the originally proposed level, however. Energy used as production material will be exempt from both energy tax and greenhouse-gas tax. In principle, after-tax domestic gasoline and diesel-fuel prices will not exceed the after-tax average prices of Japan and South Korea. On the basis of 2008, domestic gasoline price will not exceed NT$40 per liter in the 10th year.
Government units, though, still differ in the usages of energy and environmental tax income. The Ministry of Economic Affairs (MOEA) believes the income should be used to subsidize industries for the encouragement of energy conservation and carbon abatement. The tax reform committee, however, proposes to use the income in making across-the-board tax cut for local people, subsidy for low-income families to alleviate their increased burden from the new tax, and subsidy for mass transportation systems.
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|Publication:||The Taiwan Economic News|
|Date:||Oct 15, 2009|
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