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Proposed tax cut welcomed

Chunghwa Picture Tubes Ltd (中華映管), Teco Electric and Machinery Co (東元電機) and other Taiwanese makers of flat-panel displays for televisions, said the government's plan to cut commodity taxes for digital TVs will boost sales.

The tax cut, approved by the Cabinet on Wednesday, will stimulate consumers to replace glass-tube TVs, Oliver Shih, senior manager of display business at Tatung Co (大同), said at the Computex trade show.

Tatung is the parent company of Chunghwa Picture Tubes, the world's fifth-largest maker of flat-panel displays.

"Digital televisions have better resolution and can support interactive services such as movie-on-demand," Shih said.

The Cabinet's draft bill proposes that starting on Jan. 1 next year, commodity taxes on digital TVs, made locally or imported, should be cut by 50 percent. At present a 13 percent tax is imposed on digital TVs shipped into or made in Taiwan.

"We may see a replacement trend for digital TVs next year when the digital-content products become more mature," said Nora Chen, a portfolio manager at Fubon Securities Investment Co (富邦投信).

"A tax cut may only give sellers limited flexibility to lower prices because flat-panels make up the biggest portion of total costs," Chen said.

"We may offer a more competitive price for digital televisions to our customers as tax cuts help lower our costs," said Alicia Hsu, division head of sales and marketing at Teco Electric, which had a 20 percent share of the television market in Taiwan last year.

Taiwan sold about one million TVs last year, about 90 percent of which were cathode-ray tube models, said Michael Chen (陳昭宙), spokesman at Sampo Corp (聲寶), which has a 35 percent share of the nation's TV market.

Digital models will make up 15 percent of the company's TV sales this year and rise to 25 percent next year if the tax cut is implemented, he said.
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