TAIPEI (Taiwan News) — The Legislative Yuan on Tuesday passed a measure raising the annual long-term care tax deduction by NT$60,000 (US$1,900), CNA reported. 

Under the previous law, taxpayers, their spouses, or dependents who were certified by the Ministry of Health and Welfare as needing long-term care due to physical or mental disabilities could claim an annual deduction of NT$120,000. Legislators across parties said Taiwan’s rapidly aging society warrants a higher deduction to ease the financial burden on families.

During the review of Article 17 of the Income Tax Act in the Legislative Yuan’s Finance Committee, Finance Minister Chuang Tsui-yun (莊翠雲) said that the previous deduction was introduced in 2018 and had not been adjusted since. Lawmakers largely agreed on the need for an increase.

Proposed increases ranged from NT$180,000 to NT$360,000, with most suggesting the former. Lawmakers ultimately reached a consensus to raise the deduction to NT$180,000, effective Jan. 1 and applicable to tax filings in May next year.

Ministry of Finance Taxation Administration Director-General Sung Hsiu-ling (宋秀玲) estimated that raising the deduction to NT$180,000 would result in roughly NT$1 billion in annual revenue loss. However, the actual loss may exceed this once the new criteria take effect.

The Ministry of Finance estimates around 350,000 taxpayers will benefit from the new measure.