2011/01/13

Taiwan capital to levy 'luxury residence' tax

TAIPEI, January 13, 2011 (AFP) - Tens of thousands of Taipei's richest people will soon have to pay an extra tax on up-market apartments, in a move expected to generate millions of dollars in government revenue, officials said Thursday.

Under the scheme, due to take effect in July, around 10,000 households in 389 different residential buildings in Taiwan's capital will be subjected to a "luxury residence" tax, said the Taipei city government.

Criteria for what constitutes a "luxury residence" include great location, luxurious appearance, good view and tight security, it said in a statement, adding the move will generate $10 million in annual tax revenue.

This makes Taipei the first city in the island to levy a tax specifically aimed at the rich, following a recent cabinet proposal to impose a "rich man's tax" in a bid to narrow a widening gap between the haves and have-nots.

The cabinet set up a task force last year charged with finding ways to reduce the income gap, including levying taxes on high-end products and services such as mansions, yachts and private jets.

Taiwan, once a relatively equal society, is gradually seeing a more uneven distribution of wealth, reflected in official statistics.

The most prosperous 20 percent in Taiwan reported average disposable incomes of Tw$1.79 million ($59,600) in 2009, or 6.34 times more than that of the poorest 20 percent -- the largest gap since 2001.