Legislation to cut value added taxes passes first reading

The Legislative Yuan's Trans-portation Committee yesterday passed the first reading of a draft bill allowing the 5 percent value-added tax (VAT) to be refunded to foreign tourists who spend in excess of NT$3,000.

The bill, part of revisions to the Statute for Tourism Development (觀光發展條例), was devised to help boost the troubled tourism sector, especially at a time when foreign tourists have canceled or delayed plans to visit the country because of the fear of SARS.

The refunds, however, will only apply to taxes paid on shopping, while meals, accommodation and entertainment taxes won't be refunded, Vice Minister of Finance Sam Wang (王得山) said in early January.

The draft bill will still need to pass two more readings by lawmakers before potentially being passed.

Earlier this year the government said it aims to boost tourism by 10 percent, or attract 3 million foreign visitors this year from 2.72 million last year. But a Tourism Bureau official yesterday admitted to lawmakers that the goal is nearly "out of reach" because of the epidemic.

"As of May 12 this month, we have only seen about 10,000 tourists come to Taiwan," said Su Cheng-tien (蘇成田), director-general of the Tourism Bureau under the Ministry of Transportation and Communications. "About 90,000 foreign tourists arrived here during the same period last year."

"To attain our annual goal [of 3 million tourists], we must have 250,000 visitors per month," Su said. "But we only saw around 110,000 foreign tourists in April and [we] expect the figure may drop further this month."

The number of daily arrivals at the nation's two international airports was 31,544 in the period from May 7 through May 13, or about 4,500 visitors per day on average, the transportation ministry said on its Web site. International carriers have canceled 1,122 flights, or 45.3 percent of the original planned flights, during the same period because of the disease, the ministry said.