Taipei, Jan. 7, 2017
Taxation is a crisis in Taiwan. The crisis not only led to brain drain in the country, but is also the main culprit behind overseas talents’ refusal to return to the country. On December 18th and 19th of last year, 50,000 marched onto the street of Ketagalan to protest government extortion through taxation. The march, dubbed the Anti-Tax Extortion movement, is one of the largest tax-related protests in the history. Victims include Professor “L.” The professor did not want his name to be used in this interview. The professor was invited by the Ministry of Economic Affairs to return to Taiwan with over a thousand patents. Not only had he yet receive the rewards promised by the state, he was slapped with billions of dollars in taxes. This incident also cost him many business opportunities.
Tax Agency Stepped In, Billions of Dollars Worth of Assets Soon Turned into Debt
“Leaders of the country were taken aback when they visited my company to see my scientific technology. I have over a thousand patents across the world, and I think this invention is very important for the country.” Like many passionate others who wanted to contribute their talents to Taiwan, Professor “L” is well-known internationally, and therefore was invited to return home. He applied for “patent price evaluation.” After the tax agency, Ministry of Economic Affairs and Industry Bureau, and Taichung municipal government approved the evaluation, the professor planned to use the patent’s worth, valued at 300 million dollars, as the capital for his company. Instead, he received a tax bill of over 100 million dollars before the end of that year.
Spoken with anguish, he questioned the need the pay taxes since he had not sold any shares of the stock. Despite this, the tax agency ignored the professor’s appeal. “It’s not because I don’t want to pay,” professor explained. He pointed out that the solutions he provided to the tax agency were all rejected. Solutions he provided include returning of shares or the mortgage of shares to the agency. Despite all the efforts, the tax agency claimed that his stock has no value. The professor wondered how the tax agency can collect taxes from him if the shares are worthless. He accused the agency of foreclosing his properties and assets, freezing his bank account, and confiscating his patents. His company was forced to close and he was left homeless.
Even Taiwan’s “Edison” Suffered from Corrupt System
The tax agency neglected basic human rights when it irresponsibly issued random tax bills to citizens of all levels of society. Even though the professor was received by the president for his internationally-renowned work, and was even awarded the World’s Outstanding Inventors Lifetime Achievement Award by the presidential office, he still could not escape tax agency’s overreaching abuse of power. Despite its constitutionality, the agency had restricted his freedom of travel, leaving him without any income or company. “When I went to work, he (tax agency) demand in letters that I owe taxes,” the professor criticized. “I came back to Taiwan and was treated like this. It’s terrible!” According to public statement released by the Ministry of Justice’s administrative branch, this tax bill should not be issued at all, let alone rewarding the tax agency officials for issuing such taxes. Such unlawful institutional practice has prompted protests to chant “Compensate the tax Victims, end to unjust tax bills.”
Lawlessness and Likely Court Defeats
Despite litigation, the court handling tax disputes is known as the “losing court” due to it having a defeat rate of over 94%. Professor “L” was told by the court judge that despite the judge was sympathetic towards the professor’s cause, and despite that professor’s court arguments are valid, the judge still had to abide by the law, even if the law is unjust. As a result, the professor was forced to share his own experiences to remind everyone that the unjust law can even affect law experts like the professor himself, let alone ordinary citizens who possess rudimentary knowledge of Taiwan’s justice system. The professor pointed out that Taiwan’s unjust tax laws must be reformed, and he vowed to continue to protest using his spirit as a scientist.
The professor’s inventions include utilizing the world’s smallest power generating system to generate electricity while taking a shower. Such invention aligns with current administration’s goals on shifting towards green, renewable energy. When an energy agency approached him to inquire his product, he said he was scared to death. He would rather sell his product to foreign markets than to Taiwan.
Tax reform supporters appealed to Tsai administration to focus on tax reforms instead of spending 32 billion dollars to retain professional talents in the country. Supporters hoped that this proposal will prevent abuse of power by tax authorities in the next decade.