MOF vows no tax hikes this year

Minister of Finance Lin Chuan (林全) said yesterday that the government will not raise taxes this year.

"The government is unlikely to raise any taxes before the year's end," Lin told the legislature yesterday morning.

Lin, however, added that tax- reform efforts "need to be accelerated," including the implementation of a proposal to raise the value-added tax (VAT) by one to two percentage points from cur-rent 5 percent.

"A consensus needs to be immediately forged [on reforms]while legislative approval is necessary to push forward the tax-hike proposal," Lin added.

Lin said that the ministry's finance committee has set a goal of reforming the tax structure within the next five years. To avoid a backlash, Lin vowed to solicit support from the legislature before pushing forward controversial tax hike proposals in the near future.

Many in the business community are worried that President Chen Shui-bian's (陳水扁) campaign pledge not to raise taxes during his first term will only remain valid until May.

Meanwhile, Lin remained tight-lipped yesterday about the government's stance on competing against KGI Securities Co's (中信證券) Angelo Koo for the chairmanship of China Development Financial Holding Corp (開發金控).

Lin has said that if the government wins a majority of seats on the lender's 21-member board of directors after Monday's board elections, it is likely to designate its own candidate for the top job.

The government and KGI have together secured over 60 percent of the proxy votes for the board election, which would give them enough votes to oust China Development chairwoman Diana Chen (陳敏薰).