The nation's 3G operators yesterday urged the government to resolve a dispute over a five-year tax break as soon as possible to help promote the industry's growth.
"If the government still considers 3G a promising sector that will contribute to the economy, it should move quickly and effectively," Rock Hsu (許勝雄), chairman of the 3G Club (無線通訊聯盟), said at a press conference yesterday.
Hsu -- also the chairman of 3G operator Taiwan PCS Network Inc (聯邦電信) -- made the remarks in response to concern over whether the proposed tax-break will drain between NT$5.2 billion and NT$18.1 billion from the government's coffers, as the Ministry of Finance estimated earlier this week.
Taiwan PCS plans to enter the market by the end of the year, while other 3G operators including Chunghwa Telecom Co (中華電信), Taiwan Cellular Corp (
"The Ministry of Finance used the profitability and growth rate of the second-generation telecom service as a calculation base, which is not reasonable," Albert Lin (林敬堯), a Far EasTone project director, said at the press conference yesterday.
"The boom in 2G service would never apply to the 3G business, and therefore the taxes to be lost will not be as much as the finance ministry estimates," he said.
According to the Ministry of Transportation and Communications, however, the proposed tax cut will create tax losses of only around NT$1.07 billion to NT$1.33 billion in total, according to Lin.
3G services are able to conduct high-speed data transmissions via mobile phones, but the relatively high-priced 3G handsets and immature network infrastructure disinterest consumers of the advanced telecom service.
Asia Pacific Broadband Wireless Communications Inc (亞太行動寬頻), the nation's first 3G operator that began to serve service in July, originally planned to garner 710,000 customers by the year-end, but it only secured about 30,000 so far, Lin said, citing figures provided by DPP legislator Julien Kuo (郭正亮). Kuo heads the sci-tech and information committee at the Legislative Yuan.
"Despite business being not as profitable as we expected, we still need to invest more in the future," Lin said. "The government aid will help us to weather the initial stages."
As per lawmakers' demand on Monday, the finance ministry is required to update its own estimate for the possible tax loss due to the tax-break measure within a month, a taxation official told the Taipei Times yesterday, on condition of anonymity.
But the official said the telecom industry doesn't deserve the five-year tax holiday.
"They were already capitalized on the 2G business, to which the government also gave tax breaks," she said.
As the Cabinet has given its go-ahead to the tax-break policy earlier this year, to date the issue that is left to be discussed is how high the tax cut will be, and which government agency should be held responsible for making up the tax shortage, she said.
According to a Cabinet resolution passed in July, government agencies need to finance their tax-cut plans if the cost exceeds NT$50 million in tax revenues per year.
The transportation ministry, however, said the ministry has no obligation to reimburse the tax loss, as the policy was proposed last year, by the time the resolution was passed, said Tony Teng (
"I guess it will take some time to find out which department should shoulder the burden," Teng said.
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