Is agriculture taxed? The Council of Agriculture may present its report as early as today

Shih-An Ranch, a well-known egg producer, was ruled to have a profit-making purpose and is therefore required to pay "profit-seeking enterprise income tax," sparking controversy over whether primary agricultural products should be taxed. The Council of Agriculture said it would submit a related assessment report to lawmakers as early as today, but also admitted that there are still no concrete implementation details and that a social consensus has yet to coalesce.

Lawmakers demand taxation standards be set

The flashpoint of the case, Shih-An Ranch, in the 97th year of the Republic of China (2008) raised 277,000 laying hens, produced 56 million eggs a year, employed 43 insured workers (including those added and withdrawn from insurance), and had revenue of 199,126,776 yuan. It was repeatedly reported for failing to pay "profit-seeking enterprise income tax." Owner Hsieh Shih-chuan argued that current law exempts agriculture from income tax, while the Ministry of Finance maintained that Shih-An Ranch had a "profit-making purpose" and must pay profit-seeking enterprise income tax. In February of this year, the Supreme Administrative Court ruled that Shih-An Ranch must pay the tax.

The matter shocked the livestock and agricultural sectors, because for a long time the premise of agricultural tax exemption has been "self-cultivation," but once operations expand into large agribusinesses, the line between "self-cultivation" and "profit-making purpose" has always remained murky; on March 16, when lawmaker Lin Tai-hua questioned officials during the Economics Committee session, she demanded that the Council of Agriculture and the Ministry of Finance set taxation standards within one month.

Ministry of Finance: Hopes for fair taxation; Council of Agriculture lists two directions for discussion

When an upstream-downstream reporter interviewed the Ministry of Finance last Friday, the Ministry said it had already provided its opinions, and that the final situation would be left to the Council of Agriculture to review and speak on uniformly; on Sunday, Huang Chen-te, deputy director of the Council of Agriculture's Planning Department, admitted that the report had not yet been given to lawmakers because senior officials still needed to make a final confirmation, and that it would be submitted as early as today.

However, Huang Chen-te said the report does not propose clear taxation standards; it only analyzes the practical difficulties from two directions. One is the suggestion made by lawmakers in the middle of last month that all primary forestry, agricultural, fishery and livestock products be regarded as self-operated and exempt from profit-seeking enterprise income tax; the other is graded taxation according to the scale of operation.

He said that if everything is exempted or the taxation standard is set too high, society may question why so many private enterprises that are not large still have to pay tax, while these farmers do not; but if it is set too low, it could deal a blow to many farmers. Industry groups naturally hope for leniency, while the Ministry of Finance hopes for fair taxation; this may involve amending the law, and meetings are still ongoing to seek consensus from all sides.

Will it be left to the new government to handle after May 20? Huang Chen-te said he had not thought about when the taxation standards should be completed, nor had he considered the old and new governments. "The point of completion is when consensus is reached." He also stressed that the formulation of standards would not take individual cases into consideration.