Tax collection is always considered the main source of income for the government and the revenues collected via this method are of prime importance to the development of a nation.
The unclearly defined arrangements for tax collection by the central and local governments during the late Ching, was one of the elements which contributed to the collapse of the dynasty. Many opinions were raised in regard to the reform of land taxes after the founding of the Republic of China, however, the government still continued to use the system under the Ching because China was not yet united politically. Thus the central government was forced to rely on the provincial governments in matters related to the administration of taxes. The tax revenues mainly came from the deed tax, stamp tax, tobacco and alcohol tax, slaughter tax, livestock tax, additional farm taxes, tooth tax, and mineral taxes. The remaining profit of the local governments became the special fund of the central government. The main source of funds for the national treasury at that time were customs tariffs and salt tax which were under the control of foreign administrations.
The National Government established its capital in Nanking in 1927, and there was a clearly defined tax administration system between the central and local governments. The National Government also set up autonomous tariff system and implemented the new General Commodity Tax System. The income tax was also initiated in 1936. Such tax is called a direct tax whereby the government collects tax directly from individuals and enterprises. The new system thus reflected the application of the principle of fairness in the levy of taxes, compared with a reliance on indirect taxes such as the commodity tax.
After the Government of the Republic of China withdrew to Taiwan, the ‘Unified Act for Taxation on the Central and Local Tax Revenue within Taiwan Province’ was promulgated in 1951. Under the Act, all other tax collections, except for tariffs and salt taxes, which were still under the direct control of the central government, was assigned to the tax collection offices of the county and city governments. In addition, since Taipei City and Kaohsiung City were cities administered directly under the Executive Yuan, a Taipei National Tax Administration and Kaohsiung National Tax Administration were constituted directly under the Ministry of Finance. They were in charge of the collection of income tax, commodity taxes, stamp taxes, inheritance taxes, securities transaction taxes and gift taxes.
Tax administration has been transferred from the image of public power in the past into a tool to serve the people. The unending effort of the Ministry of Finance is, through a more efficient taxation system design, to provide a speedier tax payment method, simplified procedure and time, to improve relation with people.
The tax collection system is constantly being adjusted over time. For example, the household tax, defense surtax, salt tax, feast tax and slaughter tax have all been abolished. The government has also ceased to levy the farm tax and has dissolved the Tobacco & Alcohol Monopoly System, and has added land value taxes, securities transaction taxes and gift taxes. Also, changes were effected in the modification of individual income tax to become comprehensive income tax while household taxes were replaced by the house tax. All of these changes represented further advances in the administration of the taxation system. In addition, the use of digitalization means that it is not only easier and faster to complete the collection of taxes, but also that a more convenient service can be provided to the public.
In the process of tax administration reforms, many previous historical data were left behind. Through the collected items, we may refresh our memory in the past.