Taipei Times: It appears that the government has not successfully reclaimed any of the KMT's disputed property since the formation of the five-member task force in December. What are the major problems and difficulties?
Lin Chuan (
PHOTO: LIBERTY TIMES
We submitted a draft statute governing the handling of political parties' improperly acquired property to the Legislative Yuan [in September 2002], which could lend us legal basis for the issue if the draft is passed in the near future. But until the bill has been ratified, we simply have to resort to moral persuasion to get our job done.
TT: How has the KMT responded to such a soft approach?
Lin: They responded to our demands, but just not sincerely enough. The KMT has tried to limit its obligations by arguing that it would only return assets that are currently registered under the party's name, but not the profits resulting from the sale of disputed property. In the meantime, they are planning to sell disputed assets that still belong to the party, hoping to dodge more responsibility. For example, the KMT has [in May] sold the Hsinsheng Cinema (新生戲院) [in Ilan County], one of the five theaters it has promised to return to the state, without any prior notice.
And now they are trying to sell the party-run Hua-hsia Investment Holding Co (華夏創投) [through which the KMT controls a 65 percent stake in China Television (
These deals all involve assets that have been designated to be returned to the government. We think that the party should express its sincerity by either halting the sale of these properties or clarifying how it will return the money obtained from the sale of the assets.
TT: The finance ministry's data released earlier this month showed that the KMT's assets were valued at NT$19.5 billion (US$573 million), which is much lower than the public's estimates of hundreds of billions of NT dollars. Are the actual assets really worth much less than previously thought, or has the KMT gotten rid of most of it?
Lin: The NT$19.5 billion re-presents the government's assessment of the value of real estate the party has acquired [since the Japanese left Taiwan in 1945]. Some of these assets have been sold or transferred and the profits gained from these transactions have been reinvested. But the problem is that it is hard to trace and recover the yields generated from the reinvestments.
The NT$19.5 billion may not represent all the property the KMT has, especially if it has some kind of charted benefits of which we are still unaware. Since the party's most valuable assets are tied up in real estate, this is what we will focus on.
However, we may not pursue other assets if the party's net value is negative after liquidation.
TT: The ministry's statistics show that over 80 percent of the real estate has been sold, with only about NT$3.88 billion's worth of assets left. What will you do about that?
Lin: We plan to formulate a method to calculate how much profit the party has obtained from the transactions and to ask them to return as much of this as possible. But to prevent the KMT from further dumping property, we suggested earlier this month that regulations be put into effect to invalidate any [KMT] transactions completed after July or August this year.
Some people argued that this does not conform to the legal principles underlying retroactive legislation, but the Statute for the Reduction of Farm Rent to 37.5 Percent (
TT: You once vowed that you would step down if the taxation reforms cannot be successfully brought about. How has that progressed so far?
Lin: We hoped to put some of the measures into practice within the next two years. The proposed raise in the business tax rate by one to two percentage points has received the most approval in general. That could be the most likely measure to be implemented in the near future and is expected to add an extra NT$30 billion to the country's coffers.
In the meantime, we will also implement supplemental measures, including lowering the inheritance tax rate to 40 percent from the current 50 percent.
TT: Taiwan's national debt is expected to reach NT$3.9 trillion at the end of this year, and the budget deficit has grown to over NT$300 billion this year. What is the ministry's cure for the problem?
Lin: The deteriorating budget deficit resulted from growing interest expenses, amounting to NT$150 billion this year, decreasing income from stock sales and increasing expenditures that eat into the government's investment spending.
Tax reform could help contain the expanding budget deficits, and an early implementation of finance reform would be the best way to bolster economic growth and bail out the nation's finances.
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