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Taiwan: Proposed Amendments to Tobacco and Alcohol Tax

(Mar. 20, 2017) The Finance Committee and the Social Welfare and Environmental Health Committees of Taiwan’s Legislative Yuan (the main parliamentary body) approved a draft amendment to the Tobacco and Alcohol Tax Act on March 13, 2017. (You Kang Yin, Taiwan: Draft Amendment to Tobacco and Alcohol Tax Law – Released, TAX NEWS SERVICE (Mar. 13, 2017), International Bureau of Fiscal Documentation online subscription database; Tobacco and Alcohol Tax Act (promulgated on Apr. 19, 2000, as last amended Sept. 1, 2010), LAWS & REGULATIONS DATABASE OF THE REPUBLIC OF CHINA.)

The amendment proposes an increase in the tobacco tax from TWD590 to TWD1,590 (about US$19-$52) per 1,000 cigarettes or per kilogram of other tobacco products. (You Kang Yin, supra.) Instead of being included in the regular government account for revenue and expenditures, the increased tax monies would be allocated to a special fund, used to finance services related to long-term care, established in accordance with the Long-Term Care Services Act. (Id.; Long-Term Care Services Act (adopted May 15, 2015, promulgated on June 3, 2015), art. 15, LAWS & REGULATIONS DATABASE OF THE REPUBLIC OF CHINA (toggle to view Chinese text).)

According to the Ministry of Finance, Taiwan’s tobacco tax rate, first levied in 2002, has never been adjusted, and the tax “comprises 48% of the tobacco price, deviating widely from the 70% that is recommended by the World Health Organization … .” (You Kang Yin, supra.) A previous attempt to adjust the tax, launched in 2013, was not adopted by the legislature. (Wendy Zeldlin, Taiwan: Proposals to Increase Taxation of and Health Surcharge on Tobacco Products, GLOBAL LEGAL MONITOR (May 13, 2013).)