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Tang makes no promises on tax rises

Premier Tang Fei (唐飛) yesterday said he could make no promises about not raising taxes during his tenure if the legislature keeps passing bills that lead to increases in government spending.

Tang said it is the government's hope to work out its budget proposal for the next fiscal year without having to increase taxes, but there are factors "out of the government's control."

"The legislature should take 50 percent of the responsibility as to whether to raise taxes. If the bills passed by the legislature keep increasing expenses or decreasing the available resources, I can't guarantee there won't be a tax rise," Tang told lawmakers during the general interpellation session at the Legislative Yuan.

The new administration has been quick to begin planning various social welfare packages to make good on President Chen Shui-bian's (陳水扁) various campaign pledges.

Among these packages, the national pension program is expected to start on Jan. 1, 2001.

Statistics from the Council of Economic Planning and Development show that the pension program will cost the government around NT$30 billion in the first year of its launch. The Ministry of Finance had thought about imposing an additional levy on businesses to deal with the financial demand. However, in a stock market-stimulus package announced on Tuesday, the ministry pledged not to raise taxes before exhausting all other avenues to increase revenue and reducing spending. Tang pointed out that other than taxes, the government's financial sources include the issuance of government bonds and disposal of government property.

Tang said the government has also decided to implement its social welfare programs gradually in accordance with available financial resources.

"With measures to reduce spending and increase revenue, the government's balance sheet is expected to be balanced in the next fiscal year," Tang said.

Finance Minister Shea Jia-dong (許嘉棟) told lawmakers yesterday that the government's budget for the next fiscal year is still short by around NT$100 billion, and the government will need to issue bonds to deal with the shortfall.

Shea said that since the total volume of bonds issued by the government has reached its legal ceiling, the government will need to revise the Government Bond Law to resolve the problem.

However, should the effort to revise the law fail, the government may need to consider the option of raising taxes, Shea said.

The government's financial conditions are already difficult even without the new policy.

Shea pointed out that although the government has issued NT$90 billion worth of special government bonds to cope with post-earthquake reconstruction, the government still needs to issue another NT$170 billion worth of bonds for the purpose.
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