TAIPEI (Taiwan News) -- Because tax revenues have exceeded expectations, Taiwan's President Tsai Ing-wen (蔡英文) is calling for NT$40 billion in bonuses for low-income earners, with an estimated 3 million people expected to benefit from the "red envelopes" as the Lunar New Year approaches, with the average amount per person possibly reaching NT$10,000, reported Apple Daily.
In a recent conversation with officials, Tsai said that in light of a big budget surplus, the government should "share the economic dividend" with the financially disadvantage and low-wage earners. A senior Cabinet official confirmed to Apple Daily on Sunday (Jan. 6) that the subsidy fund amounts to NT$40 billion and an estimated 600,000 "low-and middle-income households" which take in less than NT$30,000 per month, are expected to benefit, or a total of 3 million people.
Premier William Lai (賴清德) reportedly held a meeting with relevant ministries to discuss the issue and the plan is to provide a one-time "subsidy" with priority given to a cash disbursement, rather than vouchers. As the Lunar New year is fast approaching, there are expectations that the "red envelopes" (紅包, hongbao) could be distributed to low-income citizens before the start of the Year of the Pig on Feb. 5.
Red-colored envelopes with money inserted inside are given as gifts for special occasions in Taiwan, as well as China, overseas Chinese communities, and many other East Asian nations. In this case, the term is being used to describe the cash subsidies the government is considering providing, though the checks will probably not actually come in red envelopes.
During her meeting with officials, Tsai reportedly said that the strong economic growth over the past two years had led to higher-than-expected tax revenues. Tsai instructed the Cabinet to put forward a plan as soon as possible, so those with lower incomes can be given the priority in sharing in the fruits of Taiwan's economic growth.
When asked about the timeframe for the release of the bonuses, the official told Apple Daily, "The next step is to restructure the cabinet, this should be the plan implemented by the new cabinet. It will need to wait for the end of the legislative session. The relevant ministries are currently discussing the issue and are still at the conceptual stage."
The official said that because there are fears that wealthy individuals who avoid taxes may be mistaken for low-income workers, they must find a way to exclude them from the bonuses. The official also emphasized that "This is not a welfare policy, but it is meant to take this year's surplus and provide it in a meaningful way to those who live on the razor's edge."
The official said that the scope of the subsidies will include 600,000 low- and middle-income households, but whether the threshold monthly wage level to qualify for the bonuses is NT$30,000 is yet to be finalized. As for the the exact amount of money to be paid per person, it will be necessary to discuss this again because of budget implications, said the official.