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Taiwan approves 'rich man's tax' in bid to narrow income gap

Published on May 17, 2014 11:17 AM
This photo taken on February 26, 2014 shows local homeless people lining up for free food outside the Grace Home Church in Taipei. In recent years the gap in Taiwan between the rich and poor has widened rapidly. -- FILE PHOTO: AFP

TAIPEI (AFP) - Taiwan's parliament has approved a so-called "rich man's tax" on nearly 10,000 of the island's wealthiest people in a bid to narrow the widening income gap.

Starting next year, those with annual net income of over NT$10 million (S$415,000), or the richest 1.5 per cent of individuals or families, will be subject to a 45 per cent income tax rate, up from the current 40 per cent, said the finance ministry.

The revised income tax law passed by parliament on Friday also includes business tax hikes on banks and insurers as well as more tax deductions for low-income families, salarymen and the disabled, the ministry said.

It is expected to generate an extra NT$65 billion more a year in revenue for the government, including NT$9.9 billion from the richest people as well as around NT$20 billion from the banking and insurance sectors.

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