Taiwan Boosts Tax Relief for Parents As Birth Rate Falls
By Fuhua Hung/Irene Lin
Taiwan is giving parents with minor children a bigger tax break, with the tax-exempt allowance increasing by 50% starting with the 2027 tax year. Parents could save between US$79 and more than US$600 per child, depending on their income tax rate. Families with children under six can also combine the higher allowance with an additional preschool deduction. The government estimates that more than two million people will benefit. But some parents and childcare advocates say that tax relief alone does not address core hurdles like high housing expenses and long working hours.
Taiwan’s legislature has sealed the deal on new tax relief for families raising underage children.
Starting with the 2027 tax year, parents will get a 50% increase in the tax-exempt allowance for each minor child. That could save them anywhere from 79 US dollars to over 600 dollars per child, depending on the family’s income tax rate.
Parents raising children under six will also be able to combine the increased tax-exempt allowance with an additional preschool deduction.
The government estimates that more than two million people in Taiwan will benefit from the changes.
Some experts are hopeful about the new policy.
CHOU CHI-CHENG, ACCOUNTANT:
"If the minor child is of preschool age parents can claim an additional deduction of [US$4,710] for the first child and [US$7,065] for the second child. When these deductions are added together the total can exceed [US$9,420] meaning families with minor children can see significant tax savings."
It’s part of the government's efforts to tackle Taiwan’s declining birth rate.
But some parents say the tax relief is merely a drop in the bucket... and that better childcare support would be more helpful.
TAIPEI RESIDENT 1:
"[US$79] per child may be too little. I don’t think it would make much of a difference. I think it would be more helpful if the amount were higher."
TAIPEI RESIDENT 2:
"I think better support for [childcare arrangements] would be more helpful than additional financial support."
One Childcare policy advocacy group echoes these concerns, saying parents often face multiple sources of pressure just to raise a family.
LI TING-HSIN, SPOKESPERSON, CHILDCARE POLICY ALLIANCE:
"Systemic problems like high housing costs and excessively long working hours need to be addressed at the root so people can envision starting a family."
The government hopes the tax breaks will ease the financial burden of raising children. But with living costs and childcare still weighing on parents, it may take more than tax relief to encourage people to start a family.
