Taiwan's TISA savings plan to offer deferred tax benefits in phase two

Taiwan is actively preparing the second phase of its "TISA" (Taiwanese Investment and Savings Account) policy, which is expected to introduce a tax deferral mechanism for savings, mirroring the model used for private retirement fund contributions. This move aims to further incentivize public investment and bolster financial preparedness, particularly for Taiwan's aging demographic.

Launched as part of the Financial Supervisory Commission's (FSC) Asian Asset Management Center initiative, TISA has shown promising results in its first year. The program has already attracted over 220,000 participants, accumulating approximately NT$20 billion (US$610 million) in assets. The policy has seen a steady monthly influx of 12,000 to 13,000 new investors, indicating growing public acceptance and engagement.

FSC Chairman Peng Chin-lung highlighted TISA's role in promoting financial inclusion, noting that the initial success was achieved through the industry's willingness to lower fees and participation thresholds. He expressed optimism about the upcoming second phase, anticipating positive announcements soon. Lin Ping-hui, chairman of the Taiwan Depository & Clearing Corporation (TDCC), elaborated that the tax benefit would likely involve "deferred taxation" on savings within a certain limit, akin to how voluntary retirement contributions are treated.

The TDCC is also spearheading a "TISA Financial Co-Prosperity Public Welfare Project," which will involve 150 educational events from September 2026 to June 2027. These events, targeting universities and social welfare organizations, aim to instill sound investment concepts and financial literacy. The program emphasizes principles like regular investing, long-term accumulation, and risk diversification, especially relevant in current market conditions. The low entry barrier of TISA makes it particularly suitable for individuals with limited funds or those new to investing, fostering a disciplined approach to building a stable financial future.

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The second phase of TISA's tax incentives is planned to adopt a 'deferred taxation' model, similar to voluntary retirement contributions, within a certain limit.