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Tax plan may not delight consumers

The Taiwan Flour Mills Association (台灣麵粉公會) and Taiwan Vegetable Oil Manufacturers Association (台灣植物油製煉公會) said yesterday they would cut flour and soy bean oil prices after the government's planned elimination of business taxes on commodity imports.

But the two associations said the decrease of between NT$31 and NT$40 per pack (around 22kg) on wheat costs, for instance, may not translate into a corresponding decrease for consumers.

Sheu Jong-ming (許忠明), chairman of both associations, said yesterday that the elimination of the business tax on commodity prices would only help prevent prices from surging.

Prices would likely continue to rise for some time, he said.

"The associations have secured 433,000 tonnes in wheat supplies for domestic use over the next five months," Sheu said, hinting that there was no prospect of a wheat shortfall for at least five months.

Sheu said he could not predict how high wheat prices would reach, however.

The Ministry of Economic Affairs has submitted a proposal to the legislature to amend the Value-Added and Non Value-Added Business Tax Act (加值型與非加值型營業稅法) to eliminate the 5 percent business tax on imported commodities -- including wheat, barley, corn and soy beans -- to zero.

Chen Chao-yih (陳昭義), director general of the ministry's industrial development bureau, said he believed the legislature would pass the amendment soon, and probably before the presidential election.
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