The government will consider reinstating an export incentive that compensates manufacturers for the duties they pay on imported raw materials after the nation’s exports fell by a four-decade high last month, Minister of Finance Lee Sush-der (李述德) said yesterday.
Lee did not elaborate on which materials would be included in the incentive.
The nation’s exports dropped by 44.1 percent last month amid the global economic slowdown, marking a sixth straight monthly decline.
The duty drawback system, which has largely been phased out, was introduced in 1955, the ministry said, and allows exporters to apply for refunds of the duties paid on imported raw materials once merchandise has been manufactured from the materials and exported.
Because of incremental declines in tariffs, the government began eliminating the system in 1984.
From that year, a refund claim was denied if the tax rate was lower than 5 percent or if the refundable tax to be offset accounts for less than 1 percent of the merchandise’s free-on-board export value.
In total, exporters received NT$400 billion (US$11.764 billion) in refunds between 1955 and 2007, the ministry said.
A total of 5,721 out of 8,729 imported raw materials had been removed from the duty drawback list as of last March.
“Citizens are obliged to pay taxes, while it is the government’s responsibility to return tax that is not supposed to be levied, even if it is only 1 dollar,” Lee said.