Tax plans spook business

Business leaders yesterday appeared to be panicking over talk of local governments planning to levy new taxes.

New taxation schemes are being hashed out since the legislature passed a local-tax statute (地方稅法通則) last November, empowering cash-strapped governments to boost revenues with tax hikes.

During a breakfast meeting with Vice Premier Lin Hsin-yi (林信義) and top government officials, members of the Chinese National Association of Industry and Commerce (工商協進會) yesterday urged the central government to stifle plans to impose new local taxes, currently in the pipeline of several local governments.

Association chairman Theodore Huang (黃茂雄) told a press conference after the meeting that "the business community will be overburdened with the new taxes."

Huang said, for example, that Taoyuan County government plans to levy an airport tax (機場稅) on airlines and tax telephone poles used by the Taiwan Power Co (Taipower, 台電) to string up power lines.

According to the county government, Taipower charges private cable companies for use of its utility poles, so the county government wants a slice of the state-run utility company's income since its poles are located on county land.

A new airport tax may also be levied on airlines based on the number of daily flights, the county government said, adding that both taxation plans are still under review.

County Commissioner Chu Li-lun (朱立倫) yesterday said that he believes there's still a long way to go before the taxation plans can be implemented.

"The plans will only be possible if the county council gives the go-ahead," Chu said, adding the county currently levies no local taxes at all.

Huang also expressed concern over the Taichung County government's plan to levy new taxes on everything from underground cables to airport noise. Other local governments are discussing taxes on hot springs and pet animals.

But Alpha Chen (陳金發), deputy director of Taichung County's bureau of finance, said the business group may be overreacting to the county government's plans.

"The county government knows that it's not feasible to levy new taxes on anything other than water," Chen said, adding the remaining tax proposals were just "ideas."

The county government is mulling a draft for the water-tax plan to be sent to the council for review, he said.

The county is aware of the business community's outright opposition to new taxes, he said.

"Given that the local-tax statute is in place, there's not much room for local governments to increase revenues by levying new taxes," he said.

But Tsai Chi-yuan (蔡吉源), a research fellow with Academia Sinica, said that the public will be more willing to pay taxes on capital gains or on property.

"New taxes always invite resentment from taxpayers, especially from businesses, because it increases their costs," Tsai said.

A reasonable mechanism to levy new taxes will help persuade taxpayers that their contributions will bring about public construction projects that will, in return, improve the quality of life and help to improve business, he said.