Lawmakers and experts suggested yesterday that the government lower business income tax for free-trade zones to lure manufacturers to such zones.
They made the suggestion during a public hearing on complementary measures for free-trade zones sponsored by a group in the Legislative Yuan to promote the tax legislation.
People First Party (PFP) Legislator Christina Liu (劉憶如) said the zones should be considered "special zones" in which there should be complete liberalization. She urged a lowering of tax in the zones to stay competitive with free-trade zones in neighboring countries.
Democratic Progressive Party Legislator Kuo Jung-tsung (郭榮宗) agreed. He said that compared with the tax ratios in neighboring countries, Taiwan imposes too high a business income tax in free-trade zones and therefore cannot entice manufacturers to set up factories.
Chao Teng-hsiung (趙藤雄), chairman of the Far Glory Group (遠雄企業), said the establishment of free-trade zones is aimed at luring Taiwan businesspeople back from China. But with a business income tax ratio of 25 percent, manufacturers will be more likely to consider China or South Korea, both of which have lower tax ratios, he said.
Chao is also the operator of yet-to-be-finished Far Glory free-trade Zone Air Cargo Park (遠翔FTZ航空貨物園區) next to CKS International Airport in Taoyuan. He suggested lowering the tax ratio, but said the level of lowering should consider neighboring countries, not just China's level.
Wei Chi-lin (魏啟林) of National Taiwan University said that if the tax ratio can be lowered, it will lure Taiwanese businesspeople and foreign manufacturers, which will in turn create higher tax revenues.
Taiwan has three free-trade zones -- in Keelung, Kaohsiung and Taichung harbors.
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