TAIPEI (Taiwan News) — Finance Minister Chuang Tsui-yun (莊翠雲) said Wednesday that Taiwan plans to increase the tax exemption for dependent children under 18 by 50% starting next year as part of broader efforts to address declining birthrates.
Chuang said the Ministry of Finance will amend the Income Tax Act in hopes of implementing the measure next year, per CNA. The policy is expected to benefit 2.7 million people and provide NT$8 billion (US$270 million) in tax relief.
As part of the government’s new policy to tackle Taiwan's low birthrate, President Lai Ching-te (賴清德) said the administration will introduce a universal monthly child allowance of NT$5,000 for children aged 0 to 18. For children aged 0 to 6, the full amount will go directly to families for flexible use.
For those aged 6 to 18, half will be given to families. The government will deposit the other half into a children's growth investment account.
Lai said the government will also expand tax reductions for families with children, CNA reported. The current special deduction for preschool children will remain unchanged at NT$150,000 for the first child and NT$225,000 for each additional child.
In addition, the exemption amount for each dependent minor child will rise to NT$151,500 for households supporting children under 18.
Chuang also said taxes on single-owner residential properties for married couples and families with children could be reduced to the tax-exempt threshold through amendments to the House Tax Act and Land Tax Act, according to CNA. More than 1 million households are expected to benefit, with estimated tax reductions ranging from NT$5 billion to NT$7.5 billion.
Lai said the Cabinet will move quickly to complete the necessary legal amendments and strengthen communication with the legislature to ensure the policies can be implemented. He also expressed hope that both ruling and opposition parties would support the proposals while balancing family support with the country’s fiscal capacity.
