每日跟讀#644: Gimme a tax break: Hands off my lottery winnings
Winning ticket holders of Taiwan Lottery or the Unified Invoice Lottery, as the system currently stands, have to pay 20 percent income tax on winnings worth NT$2,000 and above. As the threshold has existed unchanged for over 40 years, Democratic Progressive Party Legislator Shih Yi-fang has proposed a bill raising the threshold to NT$5,000. In response, Minister of Finance Su Jain-rong has promised to conduct a review and issue a report within the next three months. The ministry is expected to issue a preliminary report shortly that will detail amendments to the Standards of Withholding Rates for Various Incomes regulation. It is anticipated that this will include raising the tax-free threshold for lottery winnings from NT$2,000 to NT$5,000, coming into effect as early as December.
During a question and answer session of the Legislative Yuan’s Finance Committee in early April, Shih said that although last year Taiwan Lottery scratchcards sold like hot cakes during the Lunar New Year break, due to the 20 percent tax levy, a member of the public who wins a NT$2,000 prize actually only receives NT$1,600. He gave the example of someone who spends NT$4,000 to purchase two NT$2,000 Taiwan Lottery tickets: one of the tickets wins a NT$5,000 prize, but after income tax is deducted at 20 percent — leaving NT$4,000 — and a further NT$20 of stamp duty is paid, the person is actually out of pocket by NT$20.
Shih believes that since the Standards of Withholding Rates for Various Incomes has remained unchanged since 1979, an adjustment is now due. According to data from the Directorate-General of Budget, Accounting and Statistics, in 1979 NT$2,000 was worth NT$4,968 in today’s money. Shih says the ministry should therefore move with the times and raise the tax-free threshold for lottery winnings from NT$2,000 to NT$5,000.
Ministry officials say that the changes will not come into effect until December due to the requirement for a communication period, and because businesses may need to make adjustments to their systems
Source article: http://www.taipeitimes.com/News/lang/archives/2019/06/04/2003716267