Legislators yesterday put a halt to the review of a proposed statute that would lower tariffs on motor vehicles due to the increasingly limited prospects for Taiwan's accession into the WTOs this year.
Although the government is keen to rush the statute through the Legislative Yuan, the Yuan's finance committee didn't see a pressing need for it to be enacted, and decided to leave its review to a later date.
"Hopes for Taiwan's entry into the WTO this year are fading away," said Lai Shyh-bao (
"When the Ministry of Economic Affairs is considering canceling the preferential treatment that Taiwan promised to give to US agricultural sectors prior to Taiwan's accession into the WTO, why does the Ministry of Finance continue to press ahead with the tariff enactment?" he said.
According to current commodity regulations, vehicles with engine sizes of 2000cc and below are taxed at 25 percent.
Those with engines between 2,001cc and 3,600cc are subjected to a 35 percent commodity tax.
Vehicles with engines larger than 3,600cc are taxed at 60 percent.
Under the proposed statute, Taiwan would replace its current system of three commodity tax levels based on engine displacement, with a two-tier system.
Upon WTO accession, the tax would remain at 25 percent for vehicles of 2,000cc and below. However, vehicles with engine sizes of 2,001cc and above would be taxed at 35 percent.
The proposed statute would also cancel a 3 percent credit given to vehicles and motorcycles with locally designed engines, chassis, and bodies.
While the proposed statute also states that it will only be put into effect after Taiwan joins the WTO, the cancelation of this local design credit would eliminate what is regarded as the last piece of trade protection for the local motor vehicle industry.
It would also reduce the import tariffs on vehicles with engine sizes above 3,600cc, such as Lincoln and Benz 500 vehicles, from the current 60 percent to 35 percent.
According to the Ministry of Finance, the elimination of the local design credit would raise the commodity tax on locally-made vehicles to between NT$100,000 and NT$120,000 per vehicle.
They are currently taxed at a range of between NT$80,000 and NT$100,000.
The tariff reduction would also result in an annual loss of between NT$500 million and NT$600 million for the nation's coffers.
Although the ministry's vice minister, Yen Ching-chang (顏慶31), tried to persuade the committee to push through the updated statute, the committee members were not convinced.
Taiwan has never given up its hopes of gaining WTO membership, Yen said, and the enactment of the statute would help Taiwan's bid to enter the WTO.
RSS