Sat, Jul 15, 2006 - Page 12 News List

Finance minister announces new taxation task force

By Jackie Lin  /  STAFF REPORTER

The Ministry of Finance is forming a task force to handle various taxation issues approved by representatives attending a joint panel meeting yesterday, Minister of Finance Ho Chih-chin (何志欽) said.

Ho said that the task force would deal with issues requiring adjustments of the taxation structure, and those that might seriously affect the state coffers and require alternative means to make up budget shortfalls.

The meeting was held to seek consensus for tax-related issues discussed by the government's efficiency, financial, industrial and social security panels to prepare for the Conference on Sustaining Taiwan's Economic Development, scheduled for July 27 and 28.

Key topics on the agenda yesterday included taxation on businesses' undistributed surplus earnings, tax breaks for the service sector to hire more local employees, complementary measures before the Statute for Upgrading Industries (促進產業升級條例) which expires in 2009, simplifying taxation levied on the nation's financial products, and financial planning to prepare for an aging population.

Amid heated discussions that were sometimes mingled with provocative comments from environmental groups, the meeting dragged on for more than five hours. Wang Ying-chieh (王應傑), a representative for the General Chamber of Commerce (商業總會), walked out after expressing his discontent with one environmentalist who had unleashed a volley of criticism against industry.

Despite some arguments, rough conclusions were passed for most of the 15 issues. The decisions are subject to further discussions at the two-day conference at the end of the month.

During the meeting, Hu Sheng-cheng (胡勝正), chairman of the Council for Economic Planning and Development (CEPD) and convener of the financial panel, suggested that tax rates for derivatives should be further simplified to avoid arbitrage and make the nation a better investment environment.

Finance minister Ho said that as the government currently does not levy taxes on individual's overseas income and capital gains on stock investments, there were difficulties in implementing the financial panel's suggestion, but it would be a long-term goal for the ministry.

As the issue requires amending relevant laws, former finance minister Lin Chuan (林全), who chaired the meeting, concluded that the ministry's task force should study the complementary measures presented and gradually implement them.

Lin also instructed that the CEPD convene meetings within three months with the Ministry of the Interior and the finance ministry to handle the social security panel's suggestion that subsidies be granted to families with children under the age of two.

The interior ministry is also required to submit an evaluation report to the CEPD by year-end on how much extra funding the government needs to set aside to build a social welfare system for the nation's aging populace.

According to the social security panel's estimates, subsidies required to care for the nation's aging population will rise from NT$7.8 billion (US$238.6 million) this year to NT$20 billion in 2016.

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