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Economic reforms to be resubmitted

Government agencies said yesterday they planned to re-propose major economic, banking and tax reform proposals after lawmakers take office on Feb. 1.

Almost three-quarters of the lawmakers in the new 113-seat legislature belong to the pan-blue camp led by the Chinese Nationalist Party (KMT).

Most of the proposals have already been vetted by officials from major political parties, but did not pass in the last legislative session.

"It is normal to see changes in the political landscape, but it is important that we do not stop revising important laws to make Taiwan better," Council for Economic Planning and Development (CEPD) Chairwoman Ho Mei-yueh (何美玥) told the Central News Agency.

Ho said the renewable energy bill, a draft bill for rebuilding farm villages and revisions to the Value-added and Non-value-added Business Tax Act (加值型及非加值型營業稅法) were the government's priorities.

However, Ho said the CEPD would put its plans to legalize casinos and horse racing on hold, citing widening disputes on the issue.

"Our draft of the gambling law is not sufficient yet," the CNA quoted Ho as saying.

She said the key would be forming an effective oversight agency for the gambling industry.

On the banking front, the Financial Supervisory Commission (FSC) said its priority would be a revision to the Banking Act (銀行法) to create an exit-mechanism for troubled financial service providers.

The FSC wants lenders with a capital adequacy ratio of below 2 percent to be permitted to withdraw from the market. The regulatory capital adequacy ratio -- a measurement of a bank's financial strength that divides its net value by total assets -- is 8 percent.

The FSC is also seeking to amend the Financial Holding Company Act (金融控股公司法) to clear the way for further mergers and improve regulatory oversight of the banking sector.

The Ministry of Economic Affairs said the renewable energy bill and a revision to the Power Industry Law (電業法) were vital in an era of high energy prices.

However, the report said the MOEA would not prioritize amending the Statute for Upgrading Industries (促進產業升級條例) to lower tax rebates for emerging industries -- a key concern for Taiwan's major industries -- as a result of disputes among government agencies.

The Ministry of Finance plans to submit an amendment to the Estate and Gift Tax Act (遺產與贈與稅法) to reduce inheritance and gift tax from 50 percent to 40 percent.

Other planned tax amendments include a move to scrap the 10 percent land value increment tax and efforts to create a flexible tax rate for commodities such as corn and soybeans.

The Ministry of Finance also plans a revision to scrap the income tax exemption for teachers and members of the military.

Also See: EDITORIAL: Testing the KMT on economics
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